Homeowner Forced To Refinance To Save Home After Being Hit With Foreclosure Notice On Mortgage-Free Residence Over Unpaid, 2006 Property Tax Bill; Investor Purchased Tax Lien, Then Allegedly Sat On It For Six Years Until $500 Debt Grew To $13K Before Notifying Homeowner

In Hartford, Connecticut, NBC Connecticut reports:

• For nearly 40 years, Butch Lewis has strolled the streets of northeast Hartford. “I’ve been living on Vine Street for 37 years,” said Lewis. “Same house. Identical. My kids were raised in that house.”
  
  Lewis didn’t leave when the drug dealers tried taking over. Instead of turning away, Lewis started a neighborhood watch and helped turn this community around. “We fought back, run drug people out, and it’s quality of life,” he said.
  
  But a few months ago, Lewis got the shock of his life when he was served with foreclosure papers on the Vine Street home he’d already paid off. “This guy walks in the driveway and says, ‘We have a lien against your house. We’re going to take it,’” recalled Lewis.
  
  Turns out he was caught in a business transaction between Hartford and tax lien purchaser American Tax Funding, or ATF.
  
  It’s a common practice across the country: municipalities sell property tax liens to private companies. The companies take over the lien and by law can charge up to 18 percent interest on the back taxes – and foreclose if they don't get paid. It's a tried and true way for towns and cities to collect on delinquent taxes. But critics like City Councilman Larry Deutsch (Working Families Party) believe it shouldn't be happening.
  
  “We have to stop this practice,” said Deutsch.
  
  He explained that once the lien is sold, it is taken off of the city’s books. Lewis said he never knew he owed the city of Hartford $500 back in 2006, and didn’t even realize the lien was sold off.
  
  “We thought we were up to date. If you check our records and it says your taxes have been paid, you do not owe the City of Hartford [anything],” said Lewis. Lewis insisted that ATF only came calling after a $500 debt had skyrocketed over half a dozen years with interest and fees.
  
  “It ended up being $13,000," Lewis said. "Yeah, at 18 percent." “It’s in the interest of the company to be very quiet and then after two, three, four, five years of 18 percent accumulating, then they’ll let someone know,” argued Councilman Deutsch.

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• In the meantime, Lewis isn’t going anywhere. He worked out an agreement with ATF to pay $10,000 by refinancing his home. “We are fortunate that we can do that, but what about the other people in this city?” asked Lewis.

For the story, see Is Hartford Selling Out its Homeowners?