Property Tax Foreclosure Horror Stories (auction, foreclosed, income tax, sales)
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I have previously written about the draconian property tax policies in Michigan—both in terms of inflated tax assessments and the unjust property tax foreclosure process. Michigan’s tax foreclosure law allows for the quickest foreclosure in the nation, with no right of redemption. It also unjustly confiscates a homeowner’s equity in their home, regardless of the size of the tax bill or the value of the property involved.
One of the lawyers on CD challenged what I've written before, claiming that I was wrong because such a law would be unconstitutional. Well, a lawyer should realize that laws have a presumption of validity, and that they are enforceable until the courts determine otherwise. Such is the case in Michigan. Our property tax foreclosure law has been on the books for over 20 years and it has yet to be overturned. Hopefully, that may soon change as additional lawsuits are pending.
Does anyone have any stories about property tax foreclosures that can top these? (I doubt it!)
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 foreclosed on the Perez family’s Detroit home in 2017 over a $144 tax debt. The county then sold the property for $108,000, according to the lawsuit’s complaint.
Quote:
An 83-year-old retired engineer in Michigan underpaid his property taxes by $8.41. In response, Oakland County seized his property, auctioned it off to settle the debt, and pocketed nearly $24,500 in excess revenue from the sale.
Under Michigan law, it was all legal. And hardly uncommon.
Do you have any idea how many bills, notices, certified mailings and other summons to appear at court you have to completely ignore to lose your property over unpaid taxes?
You would think by the time you get served paperwork from the court you would figure that things are getting pretty serious. First thing I do after paying my property taxes (electronically) is verify it cleared my account and then get online with the tax office and verify it was applied to the correct account.
Do you have any idea how many bills, notices, certified mailings and other summons to appear at court you have to completely ignore to lose your property over unpaid taxes?
You would think by the time you get served paperwork from the court you would figure that things are getting pretty serious. First thing I do after paying my property taxes (electronically) is verify it cleared my account and then get online with the tax office and verify it was applied to the correct account.
You know I just read about Michigan. The property is forfeit in the second year of your delinquency and foreclosed in the third year. That is crazy fast.
In Oregon you have 4 years before they foreclose, then they give you two years of a redemption period before they auction it off. Bad things happen to good people and most people can't turn it around if something bad happens in a year.
Do you have any idea how many bills, notices, certified mailings and other summons to appear at court you have to completely ignore to lose your property over unpaid taxes?
You would think by the time you get served paperwork from the court you would figure that things are getting pretty serious. First thing I do after paying my property taxes (electronically) is verify it cleared my account and then get online with the tax office and verify it was applied to the correct account.
Most people know when they are behind on their taxes, however, a big problem is that most tax bills no longer include delinquent amounts from previous tax bills. As for notices, the County is supposed to mail two notices by first class mail--on June 1st and Sept. 1st--in the first year of delinquency to those who the County Treasurer knows from their records to have an interest in the property. If the taxes still aren't paid by the following March, the property is then forfeited to the County (or to the state if the County opts out). Once forfeited to the County, a title search is done so that all persons with a recorded interest in the property are mailed letters by certified mail. The County is also required to post a notice on each property about the pending foreclosure and the County may publish properties in a local newspaper. Some Counties take extra steps beyond those required to notify owners, but not all do.
So...although the time frame is short, most people receive notice. Problems arise when the property isn't owner-occupied, letters aren't mailed to the correct address of the owner, certified mail isn't claimed, posted notices are removed or blow away, or a person is elderly or incapable of keeping track of things.
Even with notice, however, many people simply feel overwhelmed and don't follow through as they should. Property taxes can quickly spiral out of control as punitive fees and interest are added to the tax bill. For example, a fee of $300+ is added if it goes to forfeiture, and once a property is forfeited, an interest rate of 18% is imposed upon the original tax amount--retroactive to the date the tax first became delinquent.
You know I just read about Michigan. The property is forfeit in the second year of your delinquency and foreclosed in the third year. That is crazy fast.
In Oregon you have 4 years before they foreclose, then they give you two years of a redemption period before they auction it off. Bad things happen to good people and most people can't turn it around if something bad happens in a year.
Michigan is messed up!
I think here in Texas, it can go on for ten or more years
But overall I still think we should do away with property tax and just increase or have a state income tax and sales tax.
People would probably pay a lot less in income tax yearly than property tax
The tax here in texas for a small rundown home is ridiculous.
But then the term income tax causes more people to go nuts.
The problem/question isnt whether they should foreclose or how much notice people have. The problem is the government stealing from people when they foreclose. They are foreclosing for debts of less than $1000 and KEEPING ALL THE EQUITY. Yes they should foreclose. Yes they should charge interest and fees. But keeping 80x the debt in profit is predatory, excessively punative and theft.
But overall I still think we should do away with property tax and just increase or have a state income tax and sales tax.
People would probably pay a lot less in income tax yearly than property tax
Around here, the vast majority of property tax goes to fund the local schools, with a bit going to local government. It actually makes it one of the fairest taxes out there, as the money you pay directly goes to supporting things you (ostensibly) care about and will use like quality schools. You can choose to move a town or two over, and pay less prop tax, but the school district is crap, and the houses don't sell for as much.
Likewise, a bigger house, likely having more residents, gets taxed more. Whereas an income tax goes up just because you make more money - which has nothing to do with how much value you get from your government.
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