The House Oversight and Government Reform Committee is investigating officials in Washington, D.C., regarding their foreclosure practices on properties where homeowners have not paid property taxes. The committee is examining the city's method of selling tax liens to third-party investors, who can charge up to 18% annual interest on the tax debt and file foreclosure complaints after six months.
According to the committee, if a property is foreclosed and resold, both the D.C. government and the third-party investor can benefit financially, while the homeowner receives no profits from the sale. Oversight committee chairman Rep. James Comer (R-KY) expressed concerns in a letter to D.C. Council Chairman Phil Mendelson, stating that the district's practices may conflict with a Supreme Court ruling from 2023 in the case of Tyler v. Hennepin County, which determined that governments cannot retain profits from foreclosure sales beyond the owner's tax debt.
Comer noted that while many states have adjusted their laws to comply with the Supreme Court's decision, D.C. continues to implement practices that he claims result in the loss of generational wealth for families and benefit third-party investors. The committee's investigation follows a history of controversy surrounding these foreclosure practices, particularly affecting vulnerable homeowners.
Comer highlighted the case of Bennie Coleman, a former Marine Corps Sergeant who lost his home after missing a $137 property tax payment, illustrating the potential impact of these practices on individuals. He also mentioned that homeowners could lose up to 80% of their home equity due to the sale of liens to investors.
In his letter, Comer criticized the D.C. attorney general's office for being unresponsive to the committee's previous concerns and noted that Mayor Muriel Bowser's office has not yet replied. He requested a briefing from the council by June 30, 2026. The Washington Examiner has sought comments from Mayor Bowser and Attorney General Brian Schwalb's office.