House Oversight Committee Opens Review of D.C. Tax-Lien Sales to Investors

Officials over their method of foreclosing on properties whose homeowners have failed to pay their property taxes. The committee is examining the city’s practice of selling tax liens to third-party investors. Third-party investors can charge up to 18% annual interest on the property tax debt and file a foreclosure complaint on the home after just six months.

C. government and the third-party investor can retain the equity or profits beyond the outstanding tax debt and interest, while the homeowner receives none of that money. Oversight committee chairman Rep.

C. ” The investigation will focus on whether the district is out of compliance with the Supreme Court’s unanimous 2023 decision in Tyler v. Hennepin County. In that ruling, the court held that the government cannot keep the excess profit of a property’s foreclosure sale beyond the owner’s tax debt.

The process can cause district homeowners whose liens are sold to third-party investors to lose 80% of their home equity because of debt that could have been only 20% of the home’s value. Former Marine Corps Sergeant Bennie Coleman, 76, who had dementia, lost his house after missing his $137 property tax payment once the city sold his lien to an investor.

Properties still occupied by homeowners are exempt from this method of foreclosure following a lawsuit.

C. attorney general’s office was “dismissive” in its response to the committee’s concerns expressed in 2025. Mayor Muriel Bowser’s office has yet to respond. In his letter, Comer asked the council to provide a briefing to the committee by June 30, 2026.

The Washington Examiner has reached out to Mayor Bowser and Attorney General Brian Schwalb’s office for comment.