Several Michigan counties accused of profiting on foreclosures

On Behalf of | Apr 14, 2022 | Foreclosure |

In Michigan and many other states, counties can foreclose on homes and property if the owners fail to pay their property taxes. After three years of nonpayment of property taxes, officials can initiate foreclosure proceedings on the property and place the property for sale for the amount of back taxes due. However, several counties in the state have been accused of making a profit on tax-foreclosed properties.

Class action against Michigan counties

State law requires county treasurers to foreclose on a property that is three years delinquent on taxes. The county can then receive offers from potential buyers of the property for the back taxes. In 1999, the state Supreme Court issued an opinion requiring any profits from those sales to be turned back over to the plaintiffs. The Michigan General Property Tax Act was passed in 1999 and updated in 2020.

However, nearly half of Michigan’s counties have been named in a class action brought against numerous plaintiffs who say the counties sold the properties for more than the back-taxes amount and pocketed the profits. Now, they want their share. The properties in question were foreclosed on prior to July, 2020.

Seeking legal counsel for foreclosure issues

The treasurer of Eaton County stated that most county treasurers try their best to help people stay in their home who have defaulted on paying their property taxes. Still, treasurers must also follow the law and initiate foreclosure proceedings when all other efforts fail. Whether through nonpayment of property taxes or insolvency with their personal finances, those facing foreclosure should work closely with an experienced foreclosure attorney in Michigan to help them protect their rights and obtain the best outcome possible.