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Tax-lien investors to stop taking homes through foreclosure, thanks to lawsuit

The D.C. government will pay $1 million to settle the “momentous” lawsuit

U.S. District Judge Emmet G. Sullivan described a settlement made earlier this week as “a pretty momentous occasion ... especially for those affected.” The lawsuit involved liens on properties for Washington, D.C. homeowners who failed to pay tax bills.

According to The The Washington Post, “The liens then were sold at public auctions to private investors who drew a profit by charging owners interest on top of the tax debt until the money was repaid.” Attorneys for the city argued that because the homeowners couldn’t pay their tax debts on time they then gave up their rights to their properties.

The Washington Post further reported:

“The District government has agreed to pay about $1 million to settle a federal class-action lawsuit brought by homeowners to stop tax-lien investors from taking homes in the city through foreclosure, attorneys for both sides said.

In a proposed settlement made public in court Tuesday, the District agreed to pay up to 65 percent of a property’s assessed value to homeowners or surviving relatives whose residences were taken by an often-abusive tax-collection system in which even small tax debts triggered property sales, said class attorney Bill Isaacson of the Boies, Schiller & Flexner law firm.”

For more information on the lawsuit, be sure to check out The Washington Post’s article here.

D.C. to pay $1 million to settle families’ claims for homes taken by tax-lien program [The Washington Post]