Trump Liens: 1 Size Fits All

Martin Mittlemark may win the prize for the most original holiday gift idea for 1992: tax liens on property owned by Donald Trump.

Mittlemark, president of Municipal Liens Inc. of Tinton Falls, N.J., isn’t joking.

The liens are certificates comparable to other types of securities, backed by the properties as collateral. They can pay the equivalent of double-digit interest rates, far better than investments in Treasury bonds or bank deposits.

In Trump’s case, the liens are against taxes that the flamboyant New York financier hasn’t paid on his Atlantic City, N.J., casinos. The gaming parlors all have been restructured under bankruptcy protection laws and now seem to be doing substantially better, which makes the tax liens on them worth even more.

Mittlemark, a former municipal bond and commodities trader, is an aggressive promoter of tax liens as an alternative to stocks and bonds.

Tax liens have priority over other claims, which provides a measure of investment security typically found in government bonds, he said.

What isn’t commonly understood is that private investors can buy the tax liens from city, county or state governments. Depending on the local government rules, the liens can yield anywhere from 6% to 25%, Mittlemark said.