Tax Sale

A list of properties to be sold in the Howard County tax sale today can be accessed from the Internet at http://www.co.ho.md. us/taxsale.xls. The file is an Excel spreadsheet that may be viewed online and saved. The sale will be held at 10 a.m. in the Banneker Room of the George Howard Building, 3430 Court House Drive, Ellicott City. Registration begins at 8:30 a.m. A terms-of-tax-sale form and the federal form W-9, both necessary to bid, can be obtained and filled out before the sale.

Federal investigators looking into Baltimore's tax-sale auctions have found their canary. Steven L. Berman, a veteran real estate investor from Pennsylvania, has agreed to cooperate with U.S. Justice Department prosecutors as part of a guilty plea in a bid rigging scheme. Mr. Berman is not just any canary. He has participated in tax-sale auctions in the city and five counties for several years and should be intimately familiar with the system, its vulnerabilities and payoffs. Tax sales remain a largely unnoticed, little understood process by which governments recoup unpaid property taxes and other municipal bills.

Presenting a new approach to the annual tax sale auction, Anne Arundel County officials said the efficiencies of the streamlined process that made its debut for yesterday's sale outweighed concern about the preference given to those who bid on groups of properties. Up for sale yesterday were 1,028 properties being sold in groups for prices ranging from about $18,000 to $89,000. There were 137 registered bidders by the close of the auction, about the same as last year, officials said. "Our objective is to collect outstanding property taxes, and that's what it does," said William R. Brown Jr., the county's controller.

MAYOR KURT L. Schmoke's responsiveness to the year-long investigation of the city's housing crisis by Sun reporters John B. O'Donnell and Jim Haner is encouraging. The whole system of liens on abandoned and deteriorating houses has to be rethought and overhauled.The Sun's series demonstrated how the current lien process ends up bankrupting impoverished homeowners and small investors. Worse yet, communication among the various branches of city government is so haphazard that the right hand does not know what the left hand is doing.

Baltimore is defending its practice of selling houses that have tax liens for unpaid water bills and other municipal fees, denying accusations by a major national bank that the city is responsible for a recent increase in mortgage foreclosures. The city defended the city's tax-sale practices in federal court filings this week as part of a groundbreaking lawsuit filed by Baltimore against Wells Fargo Bank. The city alleges in U.S. District Court that the bank exploited African-American families in Baltimore by offering them higher-interest loans than they offered white buyers, stripping them of equity through refinancings and charging them excessive points and fees.

Baltimore City officials on Monday auctioned liens on 12,689 homes and properties whose owners failed to pay local taxes and municipal bills — a probable record and twice as many as in 2006 in the midst of Baltimore's housing bubble. City officials said the number of liens was the highest in recent memory and reflected the severe economic downturn. Investors placed bids on liens connected to a range of properties in the online auction, from boarded-up shells and vacant lots to a few downtown office buildings.

Records turned over to a federal grand jury investigating municipal tax-sale auctions show that two of Maryland's largest tax-sale investors didn't bid against each other for properties during the past four years in Montgomery County. Bidding lists were among documents demanded in the subpoena, which also sought any records from 2002 to 2007 that would show whether bidders communicated with one another about what properties they would bid on and prices they would pay, or about any inducement not to bid on certain properties or not bid at all. The subpoena is part of an investigation being coordinated by the Justice Department's antitrust division in Washington.

THIS YEAR'S inventory of tax-delinquent real estate in Baltimore City is mind-boggling. It takes 144 tabloid pages to list the more than 38,000 properties that will be sold at auction May 14 through 17. Some of those are highly desirable buildings and lots. Speculators fight to bid on them. The reason: Successful bidders can reap an easy 18 percent profit when lax owners finally get around to redeeming the liens. For example, speculators know full well that John D. Hubble, the city's real estate officer, will cough up the $2,754 -- plus interest -- he owes on two of his Maryland Avenue properties.

At Baltimore County's annual tax sale yesterday, new regulations -- requiring bidders to quickly show their financial ability to back their bids -- discouraged fantastically inflated bidding. But large investors still bid much more than properties' market values -- thereby driving out mom-and-pop investors.Meanwhile, the pattern of inflated bidding at the county auctions -- of properties with unpaid taxes -- continued at the Prince George's County tax sale, held every day this week and continuing today.

A veteran Baltimore real estate investor could serve up to 18 months in prison for conspiring to rig bids at Maryland tax sale auctions under a plea deal that obligates him to cooperate with a continuing criminal investigation of the auctions. Steven L. Berman, in a plea agreement filed yesterday in U.S. District Court in Baltimore, admitted to a single felony count of bid rigging. Berman, 50, also agreed to pay a $750,000 fine. "This is a very unusual case," said Berman's attorney, Geoffrey R. Garinther of Towson.