Home Equity Theft: Help End This Unethical Practice

In the 12 states and Washington D.C. where home equity theft is legal, the government can take more than what it is owed in property taxes in the instance of a foreclosure. In fact, from 2014 to 2022, 8,950 homes and more than $860 million in savings were lost to home equity theft. The American Property Owners Alliance opposes this unjust practice and is urging state legislators to act now to end home equity theft—we need your help.

What is Home Equity Theft?

When an individual falls behind on their property taxes, no matter how small the debt, home equity theft allows state and local governments to seize the property and keep the full sale amount, beyond what they are owed in taxes, interest and penalties. This practice particularly hurts elderly homeowners, many of whom live on a fixed income, stripping them of their home and the wealth they have built over a lifetime.

How Can We End This Practice?

Pending before the Supreme Court right now is Tyler v. Hennepin County, a home equity theft case in which the government seized 94-year-old Geraldine Tyler’s property, sold it for $40,000, paid off her accumulated debt of $12,700 and kept the remaining equity, leaving Tyler with nothing. Ahead of the hearing, The Alliance and the National Association of REALTORS® filed an amicus brief with the Supreme Court opposing home equity theft and urging the Court to recognize its direct threat on Tyler and many other Americans.

Even if the Court rules in favor of Tyler, it will not close all loopholes that allow home equity theft, leaving many property owners vulnerable to this practice. State legislators should act now to craft legislation that ends all forms of home equity theft in their state, effectively protecting property owners and preventing the government from taking more than what it is owed. Together, we can abolish home equity theft everywhere it is permitted.

Learn About Your State’s Stance

See how property tax foreclosure laws allow the government to take homeowners’ equity, beyond what they owe, in the 13 jurisdictions where home equity theft is legal. Select a state from the menu below to learn more from our partners at Pacific Legal Foundation.