An article in Friday, Jan. 14. editions of The Washington Post stated that National Mortgage Corp., using the name "NATCO," owes the District of Columbia approximately $70,400 in delinquent property taxes and penalties. NATCO is a separate corporation. National Mortgage Corp. owns approximately 50 percent of the stock of NATCO Developers Inc., and holds a first deed of trust note on all its assets. Counsel for National Mortgage Corp. takes the position that NATCO cannot owe more than $1,904,06 to the District of Columbia, although, as reported, the District of Columbia records indicate that NATCO owes $70,400 in delinquent taxes and penalties.
The National Mortgage Corp., owner of more than 280 parcels of land scattered throughout the city, has paid no real estate taxes on the properties since acquiring them five years ago, according to D.C. government records.
Using the name NATCO, National Mortgage owes the city treasury approximately $70,400 in delinquent taxes and penalties - enough money to pay the salary of the mayor and City Council chairman for one year, or operate the city's civil defense office for six months.
NATCO has gone for years without paying the taxes apparently because no one has bought their land at the tax sale held annually by the city tax office to sell off land belonging to delinquent property owners. Their unpaid tax bill for last year alone was approximately $12,000, according to government records.
The properties, located primarily in upper Northeast and throughout Southeast, range in size from 117 square feet to three-quarters of an acre. Most of the parcels are narrow slivers of land too small for a house to occupy, and all of the land is vacant.
Although the city property tax office annually advertises the properties for sale because of the delinquent taxes, there have been no takers at the annual tax sale, and NATCO thus retains title.
Several other city property owners also do not pay their taxes, said Alfred Richards, acting chief of the property tax assessment divison of the department of finance and revenue, but NATCO is by far the largest, he said.
"If the property is of no value and no one wants to bid on it, there is nothing to force someone to pay their real estate taxes," Richards said.
No real estate tax has been paid on one of the parcels, now owned by NATCO, since 1909, although the property has been sold several times since then, according to city property tax records.
Delinquent taxes on another parcel fate from 1926 and on still another from 1942, according to property tax records.
"They (NATCO) don't pay their taxes until they are forced to pay them," Richards said recently.
John Carroll, a National Mortgage loan officer who is responsible for the NATCO account, said, "We don't have the money to pay the taxes. A lot of these properties are as big as my necktie - it's crap . . . It's property nobody wants.
He said, "the taxes are paid when the property is sold," but added. "The vast majority is unbuildable (too small to construct a house on), and we're between the rock and the hard place on what to do with it."
Not only is the city failing to collect any tax dollars from the properties but it costs the city to advertise the properties for sale every year, Richards said.
In December, the government spent more than $20,000 to publish the list of currently delinquent property owners in the city's two daily newspapers and NATCO's holdings accounted for a substantial portion of that list.
Ironically most of the NATCO properties on which taxes now are due were purchased at city property tax sales in the 1930s and 1940s by an attorney named Wilbur L. Gray.
"It was a hobby with Gray," Carroll said. During the Depression, people were not paying their taxes and Gray would attend the city sales and buy parcels of land sight unseen.
In December, 1965, Gray sold most of his holdings to Victor Orsinger, a prominent Catholic layman and lawyer who, in 1968, was convicted of stealing more than $1.5 million from an order of nuns for whom he served as a financial adviser. He was sentenced to 3-to-9 years on several counts of larceny after trust.
National Mortgage, became involved with Orsinger in 1968, Carroll said, when Orsinger asked the firm to promise to pay off a second mortgage on the Gray properties if Orsinger should default on the mortgage.
"It was a bad investment," Carroll said. Carroll was not with the company when the deal with Orsinger was made.
Orsinger did default on his payment to the Berger Company, and National Mortgage paid. Berger, also held the first mortgage on the properties, and when Berger threatened to foreclose, National Mortgage again paid Berger because the foreclosure would have prevented National Mortgage from collecting on any of its investment, Carroll said.
Edward Djang, now a lawyer in California and a former Orsinger employee who was holder of a third mortgage, foreclosed on the properties in 1971 and formed NATCO to dispose of them, Carroll said. Among the NATCO directors were two attorneys, Patricia Latham and Martin Thaler, who are with the law firm that represents National Mortgage, and William J. McAnallen, a National Mortgage official. The three were to protect the interest of National Mortgage, Carroll said.
Djang went to work for National Mortgage, selling off the parcells that were large enough for houses or located in areas where builders were assembling land for development, Carroll said.
Djang left California in late 1974 and Carroll became titular head of NATCO in early 1975, Carroll said.
Carroll refused to divulge how much money National Mortgage has invested in the properties but readily admits the company's primary interest now is selling off the valuable pieces, "We're trying to get our damn money back," he said.