Mayor Postpones Baltimore Tax Sale, Removes All Owner-Occupied Homes

Colorful early 19th century homes line Montgomery Street in the Federal Hill neighborhood of Baltimore. Photo by lspi138 from stock.adobe.com.

Baltimore will remove all owner-occupied homes from the city’s tax sale, Baltimore Mayor Brandon M. Scott (D) announced Wednesday.

Scott also postponed the tax sale, where past-due property taxes and other charges are sold at auction to the highest bidder, to June. Roughly 2,900 owner-occupied homes were entirely removed from the auction, according to the city.

“This is about making sure that we’re protecting our homeowners and our legacy homeowners,” Scott said in announcing the move at a Wednesday Board of Estimates meeting.

The annual tax sale is an online auction used by the city to collect overdue bills. Bidders pay for the various property liens owed to the city in exchange for a tax sale certificate, which gives the winning bidder the right to file a tax sale foreclosure lawsuit.

Property owners can “redeem” the property by paying the bidder for the liens and other charges paid during the tax sale — in addition to interest and other costs imposed by the lienholder — to avert a foreclosure.

Claudia Wilson Randall, the executive director of the Community Development Network of Maryland, praised Scott’s decision and said that, while the tax sale results in a short-term revenue boost for the city, the practice creates a long-term loss as homeowners’ liens are bought and some lose their homes.

“This largely hits older African American women who are widowed or divorced, who worked a lifetime to get that house to maintain that house,” she said. “And now they’re falling victim to a system which is really about the city getting a lot of cash and people purchasing liens.”

Wilson Randall, a member of Scott’s Tax Sale WorkGroup, said that, as the city tries to curb vacancies, tax sales create a “steady loss of properties.” She also noted that there is millions of pandemic-related relief funding available to help homeowners pay off their back taxes.

John Kern, the program manager of the Stop Oppressive Seizures (SOS) Fund, said homeowners who were facing tax sale are “incredibly relieved to have this extra time,” — but also said there is much work to be done to enroll homeowners in local and state aid programs to pay off their back taxes.

“The debt is not forgiven,” Kern said. “The meter is running.”

Kern said that, despite the $250 million Maryland Homeowner Assistance Fund created with federal American Rescue Plan Act money opening applications in January, very few Baltimoreans have successfully applied for that program. And The Baltimore Sun reported that only 18 Baltimore homeowners have had their applications to that program approved so far.

Kern said many homeowners may not be aware that the program offers assistance to homeowners with property tax debts — grants of up to $20,000 — as well as loans of up to $40,000 for people who need mortgage assistance.

Baltimore also has its own program, the Tax Sale Exemption Program, which lets successful applicants have their property removed from the tax sale in the year they apply.

Councilmember Danielle McCray, who sponsored the legislation to create that program, said in a release that “rebuilding our city must begin with stabilizing our homeowners.”

Wilson Randall said one underutilized tool for aiding with property taxes is Maryland’s Homeowners’ Property Tax Credit. That program puts limits on property taxes based on a homeowners’ income.

She said city and state officials need to do more to reach out to homeowners about applying for aid programs and tax credits.

“There’s a lot of hoops to jump through in order to get that tax credit,” Wilson Randall said. “And you have to certify your income each year … even if you have zero income.”

Kern said he’s also concerned about “tangled titles,” which can occur when someone dies without a will and doesn’t transfer their deed before their death. Kern said people in those situations might not be eligible for state and city programs, although he said the state is now sending applications from Baltimore with tangled titles to the Maryland Volunteer Legal Service to try to determine a path forward.

He added that he’s encouraged by the growing number of homeowners being removed from the tax sale. Last year, Scott removed 973 homeowners from the tax sale — and nearly tripled that figure this year.

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