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property tax foreclosure

court gavel
Steve Carmody/Michigan Radio

Oral arguments will take place Thursday in the Michigan Supreme Court in a lawsuit challenging Michigan's property tax foreclosure law.

The case is about whether counties that keep surplus proceeds from a tax foreclosure sale violate the takings clause of the U.S. and Michigan constitutions.

City of Detroit

Detroit and Wayne County officials say a new program could help keep thousands of the lowest-income homeowners in their homes and out of tax foreclosure.

The plan, called Pay As You Stay (PAYS), calls for cutting the amount of money people owe on delinquent property taxes. It would reduce the balance to only those back taxes, or 10% of a home’s taxable value—whichever is less.

Some low-income Detroiters with property tax debt should soon get a chance to get that debt wiped out, thanks to a new program from the Wayne County Land Bank.

The program will work through a legal process called quiet title. The land bank will take ownership of the home. Then it will use quiet title to clear any debt attached to the property, and return the home to the former homeowners.

blighted home in Detroit
Bridge Magazine

Wayne County will foreclose on fewer Detroit homes this year for the fourth straight year, according to numbers the Wayne County Treasurer’s Office provided on Friday.

Wayne County has 3,023 residential Detroit properties on its tax foreclosure list right now. 1,083 of them are believed to be occupied homes.

Erica Perez
Sarah Cwiek / Michigan Radio

Can a county government seize a home for back taxes, sell it for price that exceeds the tax debt, and pocket the profits?

That issue is at the heart of the lawsuit that Erica Perez filed against Wayne County and County Treasurer Eric Sabree Tuesday.

Wayne County

Wayne County Treasurer Eric Sabree is applauding a new law signed by Governor Gretchen Whitmer that allows county treasurers to work with homeowners, and implement payment plans with reduced interest rates on back property taxes.

A temporary law from late 2014 allowed this, but was scheduled to sunset June 30th. Now, the law has been extended until 2026.

foreclosure sign outside old home
Steve Carmody/Michigan Radio

Detroit offers people living in poverty a 100% exemption on their property taxes. It’s Detroit’s local adaption of a state law. But many Detroiters living below the poverty line don’t know about it. 

Steve Carmody / Michigan Radio

A deadline is looming for Wayne County property owners hoping to avoid foreclosure.

Taxpayers have until Thursday to visit the Wayne County Treasurer's Office to make a payment on their unpaid taxes from 2016 or enroll in a payment plan.

Sarah Hulett / Michigan Radio

Detroit Mayor Mike Duggan will deliver his sixth State of the City speech on Tuesday, March 5. Duggan's office has not released any details of the planned speech, but in the past, he has focused on issues like affordable housing, jobs, and education. 

pile of one dollar bills
Steve Carmody / Michigan Radio

Civil asset forfeiture. Court fines and fees. Property tax foreclosure laws.

All are things local governments in Michigan use to operate and fund themselves. And all could be changed by a new U.S. Supreme Court ruling.

The case had to do with whether police in Indiana could seize a man’s car after he was charged with selling heroin.

Even though the man was convicted, the court ruled the seizure was illegal because the car was worth many times more than the maximum fine for the crime. In other words, it was an excessive fine or fee—the kind prohibited by the Constitution’s 8th Amendment.

An old house with a foreclosure sign in the yard
Steve Carmody / Michigan Radio

In the new year, the Michigan Supreme Court will decide whether counties can continue to hit the jackpot when foreclosing on properties.

Counties routinely sell real estate when taxes are long overdue. State law allows them to pocket everything - even if the sales price exceeds the amount of debt. The Supreme Court has agreed to consider whether it's an illegal government taking under the Michigan and U.S. Constitutions.

foreclosure sign in front of house
Steve Carmody / Michigan Radio

The city of Detroit runs an annual property tax-exemption program for its lowest-income homeowners. The deadline is Monday, but many qualified residents don't know about it or struggle with their applications.

They risk heading into foreclosure and eventually seeing their homes sold in the Wayne County Tax Foreclosure Auction.

New Detroit property tax proposal is in the works

Oct 29, 2018
Jodi Westrick / Michigan Radio

Relief could be on the horizon for Detroit homeowners who missed their chance to apply for a property tax exemption. 

The Homeowners Property Tax Assistance Program offers relief to low income Detroit homeowners who can't afford their property taxes. But a lot of people don't know about it. And homeowners have to re-apply every year. 

The Tricycle Collective is working to help keep families in their homes through the tax foreclosure crisis in Detroit.
Michele Oberholtzer

515 Detroit families have the opportunity to stay living homes that were headed to tax foreclosure auction this fall.

They’re on the list for a buy-back program that involves the city of Detroit, Wayne County, and a non-profit housing group.

Sarah Cwiek / Michigan Radio

Another 50 Detroit families will own the homes they currently live in, thanks to a city program.

City of Detroit

After years of being ravaged by property tax foreclosures that claimed more than one in three city homes,  Detroit will see fewer than 5,000 properties go to the annual Wayne County tax auction this fall.

The county announced preliminary 2018 tax foreclosure numbers Friday. They show the county is set to foreclose on 4,676 properties this year, with 1,499 of them occupied properties.

Sarah Cwiek / Michigan Radio

Detroit expanded a program this year that gives some people a last-minute chance to avoid tax foreclosure, but its reach could be limited by time and money.

Urban Institute

African-American homeownership has fallen further in Michigan than in any other state since 2000, and a growing number of low-income renters in Metro Detroit are “being squeezed from all sides” when it comes to finding affordable housing.

Those are two just two notable conclusions from a series of reports released by the Urban Institute this week about major issues in Southeast Michigan’s housing market.

Wayne County

Detroit has settled a lawsuit filed by the ACLU, alleging the city made it too difficult for residents to learn about, and qualify for, a property tax exemption based on poverty.

Thousands of Detroiters in poverty paid property taxes they didn't owe because they didn't know they were exempt, and the city didn't tell them.  Many lost their homes at tax foreclosure auctions when they couldn't pay the taxes.

Sarah Cwiek / Michigan Radio

One Detroit family celebrated getting a new home Thursday, as they also called for other families like them to receive similar compensation as victims of what they call “illegal” foreclosures.

House Foreclosure
Steve Carmody / Michigan Radio

new lawsuit says Michigan’s property tax foreclosure laws are unconstitutional and amount to “government sanctioned theft.”

The case was filed this week on behalf of two men who lost Oakland County properties to foreclosure.

One of the men, Uri Rafaeli, lost a rental property in Southfield when he miscalculated the amount of interest he owed on 2011 property taxes by $8.41. Oakland County foreclosed, then sold the home for $24,500.

BasicGov / Flickr - http://bit.ly/1rFrzRK

Many people in Detroit cannot or, sometimes in the case of landlords, do not pay property taxes. Every year, the Wayne County Treasurer's Office seizes owner-occupied homes and puts them up for auction.

Even with recent efforts to get homeowners on installment plans, lowering interests rates, and letting more low-income people know they might be eligible for property tax wavers, it hasn’t been enough to keep many people in their homes. There’s a high poverty rate in Detroit.

A foreclosure sign.
Steve Carmody / Michigan Radio

An effort to help some Wayne County residents from losing their homes to tax foreclosure seems to have stalled. Until the last minute, low-income property owners were being encouraged to apply for tax exemptions, with the hope of preventing their homes from being sold at Wayne County’s annual auction of tax-foreclosed properties.

Detroit City assessor Alvin Horhn’s office promoted the idea that some low-income homeowners might be able to avoid tax foreclosure this year if they hurried to apply for a tax exemption.

Steve Carmody / Michigan Radio

Many homes that go into tax foreclosure in Detroit are owned by landlords. The renters are often booted out once the homes are sold at auction.  

In a pilot project, Detroit has bought 80 of these homes where tenants have expressed interest in becoming homeowners.  The city used right of first refusal for the purchases. That means the city can buy the properties before they go to auction, paying only the county and state portions of the taxes owing, but not the city portion.