Wayne County to Resume Property Tax Foreclosures in 2024: A Shift After Four-Year Pause

Wayne County Treasurer’s Office is gearing up to resume property tax foreclosures in 2024, ending a series of moratoriums initiated in 2020 in response to the COVID-19 pandemic. These measures, varying from a complete halt to foreclosures to targeted pauses for owner-occupied homes, were designed to provide residents with much-needed stability during uncertain times. “It gave people some relief and it gave them time to regroup,” Eric Sabree, Wayne County Treasurer, conveyed to the Detroit Free Press, underscoring the temporary relief these moratoriums offered to the community.

With an upcoming deadline, taxpayers are being reminded to clear any overdue property taxes, establish a payment plan, or seek an extension due to financial hardship by the upcoming Monday. The fluctuating nature of foreclosure numbers was highlighted by Sabree, who noted that while the year began with 37,000 parcels at risk across Wayne County, this number is progressively decreasing. The efforts to avert foreclosures last year, particularly for about 3,400 owner-occupied residences, were notably bolstered by a judicial ruling, with Sabree optimistic about removing eligible homeowners from the foreclosure list through Detroit’s Homeowners Property Exemption (HOPE) program, aiming to save over a thousand homes from foreclosure.

Foreclosure represents a dire loss for homeowners who fail to pay property taxes for three years, culminating in their properties being auctioned publicly. The upcoming resumption of foreclosures follows the depletion of Michigan Homeowner Assistance Fund (MIHAF) resources, which had successfully exempted 6,382 taxpayers from foreclosure by erasing their tax debt with $27 million in aid.

Furthermore, Sabree’s office is scrutinizing properties in Detroit valued below $35,000, seeking to facilitate payment plans and verify eligibility for poverty tax exemptions. This initiative aligns with a Detroit City Council resolution prompted by advocacy from the Coalition for Property Tax Justice, urging a halt on foreclosures for all owner-occupied homes under $34,700 in value. This resolution gains context from a University of Chicago study indicating potential over-assessment of Detroit’s lowest-valued homes, though Sabree asserts that such over-assessment claims do not impact the county’s foreclosure decisions.

Highlighting the plight of homeowners faced with exponentially increased tax debts due to added interest, penalties, and fees, Sabree shared instances where minor tax bills surged dramatically over time. Efforts are ongoing to integrate affected individuals into payment plans, aiming to mitigate the financial strain.

Margaret Dewar, Professor Emerita at the University of Michigan, emphasized the significance of relief programs for those struggling with property taxes, noting the considerable impact of partial moratoriums coupled with existing aid programs like Pay As You Stay (PAYS) and the Detroit Tax Relief Fund (DTRF). Dewar expressed concern over the potential consequences for residents post-foreclosure, including the risk of displacement and the transition from homeownership to renting or living with relatives.

The urgency for systemic changes was echoed by Bernadette Atuahene, a law professor and executive director of the Institute for Law and Organizing, who advocated for a 30% reduction in assessments for homes under $34,700 in value. However, Detroit’s Deputy Chief Financial Officer and Assessor, Alvin Horhn, highlighted legal constraints in altering assessed values outside the designated appeals period, despite acknowledging the over-taxation of homeowners by at least $600 million between 2010 and 2016, as revealed by a 2020 Detroit News investigation.

Homeowners seeking to navigate foreclosure prevention have several options, including the Stipulated Payment Agreement (REGSPA), Interest Reduction Stipulated Payment Agreement (IRSPA), Distressed Owner Occupant Extension (DOOE), and Pay As You Stay Payment Agreement (PAYSPA). Detailed information about payment plans and ways to avoid foreclosure, go to bit.ly/foreclosurepaymentplans, call the Wayne County Treasurer’s Office at 313-224-5990 or email taxinfo@waynecounty.com.

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