When a homeowner falls behind on their taxes or water bill, the city sells the debt. Private companies buy it and add fees and jack up interest rates which can lead to property owners losing their homes.
Public advocate Leticia James is concerned that these debt sales seem to be happening primarily in low-income neighborhoods. She attended a City Council finance committee hearing on Wednesday, and asked the city's Finance Commissioner, Jacques Jiha, about the practice of profiting off of debt and foreclosures.
The City Council is considering new legislation to curb this, while still enforcing tax payments.
The legislation would lower the interest rate on outstanding debts from 9 percent to 6 percent. It would also require more aggressive outreach to delinquent homeowners.