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Gray Calls For Moratorium On D.C. Tax Lien Sales

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D.C. Mayor Vincent Gray is calling for an immediate halt to the sale of tax liens after an investigation found some elderly homeowners were driven into foreclosure.

According to the Washington Post, the D.C. government has for years sold tax liens for some unpaid property tax bills to private investors as a way to recoup money. But the program has grown into a system where a $500 tax bill can balloon into a $5,000 debt because the investor charges the homeowner thousands in legal fees and interest.

The practice has forced some elderly homeowners to lose their homes. Gray responded to the Post report by saying he was shocked and outraged.

"So one of the immediate things we will do is put a stop to that," he said. "How can we be a great city when we allow things like this to happen?"

Gray says he first learned about the problem over the weekend when he read the newspaper. But a letter dated April 2012 from the Alliance to Help Owners Maintain Equity was sent to Gray and Council Member Jack Evans (D-Ward 2) raising a lot of the same concerns highlighted in the investigation. The mayor's office says Gray's policy team never saw the letter from the Alliance to Help Owners Maintain Equity due to a mail sorting mistake.

Gray, meanwhile, has directed criticism of the program toward the CFO's office, which oversees tax liens and is independent from the executive branch.

Through a spokesman, the CFO said that the last questionable tax lien sale dates back to at least 2008, after which the office implemented safeguards to ensure that homeowners facing small tax liens weren't driven into foreclosure.

The CFO's office also said that it would not halt the tax lien sales until the Council passed legislation ordering it to do so.

Both Gray and Evans say they will pursue immediate legislative action to remedy some of the problems in the tax lien program when the Council returns later this month.

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