icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm
13 Jul, 2010 05:42

US homeowners risk repossession over unpaid bills

The US city of Baltimore has been hit with an unprecedented number of house repossessions, blamed on laws that allow people's debt to be sold to companies.

Vicki Valentine’s house used to be in one of Baltimore’s poorest neighborhoods. It was not her dream home, she admits, but at least it provided a roof over her head.

In February this year, however, in a debacle that began with a $360 water bill, Vicki and her 17-year old son were forced to leave their home.

I still don’t understand why it was sold,” Vicki confessed.

Vicki’s claimed debt, just as the debt of thousands other Americans, was sold by the local government to a private investor. This is a common practice in which once the debt is sold, the private debt collector adds fees and interest rates to it, which in turn tends to further increase the debt. In Vicki’s case, the final debt exceeded $5000.

Who has an over $5000 water bill? That’s unreal,” Vicki said. “That’s enough to supply the entire region with water here.”

A former mental health counselor, Vicki had been unemployed for years, while taking care of her sick father. She said there was no way she could pay off the debt.

Asked why her water supply was not simply shut off due to the unpaid bill, Vicki appeared equally puzzled.

I’d like to have an answer to that too,” she said.

In a recent auction Baltimore sold liens on more than 12,000 properties, a quarter of which reportedly involved amounts less than $700.

There are many houses in Vicki’s neighborhood that have been boarded up – many over the same piffling utility bills. This begs the question: what pushes the government to sell even such insignificant debt, knowing that when private debt collectors become involved the bills inflate tenfold and sometimes more?

Looking at the hundreds of people who have lost their homes in Baltimore over relatively small bills, members of the city council are urging state legislators to set new limits on sales of tax liens to private investors.

What we’re asking for is that the General Assembly stipulate that for Baltimore city you can’t put a property in a tax sale for a water bill that is less than $750,” said Council Member Belinda Conaway.

“These are not good Samaritans who are out helping people,” Conaway said. “They are doing it for financial benefit.”
Vicki Valentine, who now lives with her mother in a one bedroom apartment, is planning to sue the city for losing her home after what she claims to be an unfair trial.

Tracking down the payments she had made over several years, she said she could not understand why her house was put on tax sale in the first place.

Vicki says that originally the city had even failed to notify her that her debt was sold – something that she found out about only a year after it happened.

Among the receipts that Vicki has retained to attest she had kept up with her utilities is proof of a $1,000 dollar payment she made in 2005. Vicki insists this should have been enough to cover whatever debts she might have had.

I took it to the court, tried to show it to the judge, but she said she was ready to rule, she didn’t even want to see it,” Vicki said.

The court then ruled against her, ordering the seizure of the property and handing it to the investor that bought the debt. Vicki’s debt was bought and sold several times among investors.

The debt collectors that Vicki dealt with were not available for comment. However, Vicki says her issue is not with the debt collectors, but with the government that sold her out without hesitation, leaving her to search for a roof over her head.