For thousands of Detroit and Wayne County residents, the damage caused by Michigan’s tax foreclosure crisis did not end when the property was taken.
Families lost homes they had owned for decades, neighborhoods were hollowed out, and potential generational wealth disappeared block by block. In many cases, homes were sold at auction for far more than the taxes owed, yet former owners received nothing from the sale.
That changed after a series of landmark Michigan Supreme Court rulings reshaped how the state handles tax foreclosure profits.
Wayne County officials now say people whose properties were foreclosed may be entitled to money if those properties have sold at auction for more than the minimum bid amount. Former owners and others with a legal interest in the property have until July 1, 2026, to file a claim for potential surplus proceeds.
The message from the Wayne County Treasurer’s Office is simple: don’t leave money on the table.
Under Michigan law, specifically MCL 211.78t, people who owned the property or held a “meaningful equity interest” at the time of foreclosure may qualify to receive remaining proceeds after taxes, interest, penalties, and administrative costs are paid.
That includes homeowners, mortgage holders, and lienholders.
The Treasurer’s Office says eligible residents should immediately download and complete a Notice of Intent form available through the county’s Claims & Auction page at WayneCountyMI.gov/Treasurer. The form must be notarized and submitted either in person or through certified mail to the Wayne County Treasurer’s Office at 400 Monroe Street, 5th Floor, Detroit.
County officials say waiting could cost people thousands of dollars. The issue is especially meaningful in Detroit, where tax foreclosure became one of the defining crises of the post-recession era.
Previous reporting by Michigan Chronicle documented how Wayne County has already returned more than $3.8 million to former property owners and interest holders tied to earlier foreclosures. Those payments followed years of criticism over Michigan’s former practice of allowing counties to keep surplus profits from tax foreclosure auctions.
For decades, Michigan counties could seize a property over unpaid taxes and then sell it at auction, even if the final sale price greatly exceeded the debt. Former owners walked away with nothing.
Housing advocates and legal scholars argued the practice disproportionately harmed Black homeowners in Detroit, where inflated property assessments and economic instability pushed thousands into foreclosure after the Great Recession.
Entire neighborhoods were destabilized, especially between 2011 and 2015 when Wayne County foreclosed on tens of thousands of Detroit properties. Many homes were purchased by speculators for a fraction of their market value, only to fall back into tax delinquency again years later.
The legal turning point came through Michigan Supreme Court decisions including Schafer v. Kent County and Hathon v. State of Michigan, which ruled that governments could not keep profits beyond what was owed in taxes and fees.
The rulings forced counties statewide to create processes allowing former owners to reclaim surplus proceeds. Wayne County Treasurer Eric Sabree has repeatedly emphasized that the money never belonged to the county in the first place.
“This is money that belongs to the people,” Sabree previously told Michigan Chronicle. “When someone is legally entitled to proceeds from the sale of tax foreclosed property, we believe it’s our responsibility to inform people that those dollars are available and can be returned to them.”
Still, one of the biggest challenges has been awareness. Many residents who lost homes years ago assumed every connection to the property ended after foreclosure. Others moved, lost records, or never learned they might qualify for compensation.
Legal experts and housing advocates say confusion around the process remains widespread. CBS Detroit recently reported that many former homeowners across Wayne County still do not know they could be eligible for surplus funds tied to foreclosed properties sold at auction.
That is why county officials are urging people to act now rather than wait until after the auctions conclude.
Here is how the process works:
Residents must first confirm that the property was foreclosed and determine whether they held ownership or another recognized legal interest in the property at the time.
Next, they must complete the county’s Notice of Intent form, provide information about the property and their ownership interest, and have the document notarized before submission.
The completed form must be delivered to the Treasurer’s Office by July 1, 2026.
If a claim is properly filed, the Treasurer’s Office says claimants will receive additional paperwork — Form 5744 — by January 31, 2027. That form allows claimants to formally file a motion in Wayne County Circuit Court between February 1 and May 15, 2027.
A judge will then determine whether surplus funds exist and how payments should be distributed.
County officials stress that filing the initial Notice of Intent before July 1 is critical. Missing the deadline could eliminate a claimant’s opportunity to recover funds entirely.
The Treasurer’s Office is also encouraging residents to seek legal guidance if they are uncertain about eligibility or documentation requirements.
The State Bar of Michigan’s Legal Referral Center can provide assistance at irs.michbar.org or by phone at (800) 968-0738.
The county has published a checklist encouraging residents to:
- Download the claims documents
- Confirm foreclosure dates
- Verify ownership or lienholder status
- Complete and notarize forms
- Submit documentation before July 1
- Monitor mail for court filing instructions in 2027
The broader conversation surrounding foreclosure in Detroit remains emotionally charged because the effects are still visible across the city.
Vacant lots remain where family homes once stood. Elderly residents who lost homes over relatively small tax debts continue to struggle financially. Entire communities are still rebuilding from years of displacement tied to aggressive foreclosure practices.
Even as Wayne County works to return surplus proceeds, officials continue to stress foreclosure prevention as the top priority.
Earlier this year, the Treasurer’s Office urged homeowners who are behind on taxes to enroll in payment plans and assistance programs designed to help residents avoid foreclosure altogether. Wayne County reported that tax foreclosures have declined dramatically in recent years, reaching some of the lowest levels seen in decades.
But for residents who have already lost property, the new claims process is a second chance to recover at least part of what was taken. But again, the deadline is approaching quickly.
