Deadline to avoid property tax foreclosure in Wayne County is April 1. What to know.
After four years, the Wayne County Treasurer's Office said it expects to resume all property tax foreclosures in 2024.
Taxpayers have until Monday to pay off delinquent property taxes, get into a payment plan or apply for an extension because of a financial hardship. Since 2020, the Treasurer's Office has had a range of moratoriums, from a halt on all tax foreclosures when the COVID-19 pandemic first began to a stop on foreclosures for owner-occupied homes last year — a move that has kept people in their homes.
"It gave people some relief and it gave them time to regroup," Wayne County Treasurer Eric Sabree told the Free Press on Tuesday.
Sabree wouldn't say how many properties are subject to foreclosure this year because the numbers fluctuate daily, he said. However, he said that in early January his office began with 37,000 parcels across Wayne County that were at risk of foreclosure and the number is working its "way down," he said. Last year, about 3,400 owner-occupied residential properties were at risk of foreclosure before a court decision halted the process. Sabree expects to remove from the foreclosure list homeowners accepted for a poverty tax exemption through the city of Detroit's Homeowners Property Exemption (HOPE) program. He estimates that will keep more than 1,000 homes out of foreclosure.
Tax foreclosure is the process by which homeowners lose their property because they didn't pay their property taxes for three years. The properties are then put up for sale at two public auctions in the fall.
Foreclosures were halted last year because funding was available to pay off delinquent property taxes, Sabree said. The Michigan Homeowner Assistance Fund (MIHAF) kept 6,382 taxpayers out of foreclosure by wiping away their tax debt with $27 million in aid, according to the Treasurer's Office. Now, that money is exhausted. People who are in the MIHAF pipeline, and who have not been denied, will be kept off of the foreclosure list, he said.
Sabree's office is also reviewing properties in Detroit valued under $35,000 and has identified 375 such properties. The office is looking to get those taxpayers onto payment plans and is checking to see if those homes were eligible for a poverty tax exemption. The Detroit City Council on Tuesday passed a resolution calling on Sabree to halt foreclosures on all owner-occupied homes valued under $34,700, following a push from advocates with the Coalition for Property Tax Justice.
The group recently released a study that suggests more than half of the lowest-valued homes — or those sold between $3,400 to $34,700 — in Detroit were over-assessed. The study, by the University of Chicago Harris School of Public Policy, looked at 3,452 residential property sales between April 1, 2023, and March 14, 2024. The findings are preliminary because they are based on tentative 2024 property assessments.
Sabree said the over-assessment of properties referenced in the resolution has "no bearing" on the county's foreclosure process and decision.
"It's not a valid reason to withhold properties from foreclosure," Sabree said Tuesday.
He said his office is reviewing lower valued homes that have pending foreclosures and found original tax debts that ballooned because of interest, penalties and other fees. He cited examples of relatively small tax bills that increased over time, including one that is now $198, up roughly 247% from 2016 when it was $57, and another that is $828, up 149% from 2020 when it was $333.
"We're looking to see what we can do to get these people on payment plans," he said.
Margaret Dewar, professor emerita at the University of Michigan who studies foreclosures, said it's important for people who are struggling to pay their property taxes to apply for relief programs. She said the partial moratoriums had a big impact over the past few years when paired with existing programs, including Pay As You Stay (PAYS) and the Detroit Tax Relief Fund (DTRF), which cleared tax debt.
"They've given people fresh starts," she said.
Still, she worries about what will happen to residents after foreclosures resume.
"People will lose their homes and we will again be seeing transition of people from owners to renters or doubling up with friends and family," she said.
Dewar stressed the importance of people being able to easily access the HOPE program, which can reduce or eliminate the current year's property taxes for those who are eligible.
On Tuesday, the City Council also passed a resolution calling on Deputy Chief Financial Officer and Assessor Alvin Horhn to reduce assessments, by 30%, for homes valued under $34,700.
"We need systemic change," said Bernadette Atuahene, professor at the USC Gould School of Law and executive director of the Institute for Law and Organizing, during a news conference this week.
In a statement, Horhn said the city of Detroit’s Office of Assessor, aside from mistakes of "fact or law" in specific assessments, does not have the "legal authority to reduce assessed values on residential properties outside of the two-month long appeals process which has now ended" and noted that it is confident in its assessment process.
The statement went on to say both City Council resolutions "rely upon a study that used an impermissible methodology under Michigan law that assumes location of property does not affect its value."
The city overtaxed homeowners by at least $600 million between 2010 and 2016, a 2020 Detroit News investigation found. More than 92% — of the 173,000 Detroit homes reviewed — were found to be overtaxed by an average of $3,800. Over-assessments can lead to inflated property tax bills and tax foreclosures.
How to get help
For more 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.
Here is a rundown of available plans:
Stipulated Payment Agreement (REGSPA) allows all taxpayers to make a down-payment and pay off taxes based on an agreed-upon schedule. The required down payment is now 60%.
Interest Reduction Stipulated Payment Agreement (IRSPA) allows those who own and live in their homes to get their interest rates reduced from 18% to 6%. People can pay off taxes within five years.
Distressed Owner Occupant Extension (DOOE) allows those who own and live in their homes, who can prove they are suffering from a financial hardship, to extend the redemption period for their property for one year. In other words, they have until March of next year to pay off tax debt or get onto another payment plan.
Pay As You Stay Payment Agreement (PAYSPA) allows those who are low income to apply for a property tax exemption, through participating city and township tax assessors, and get a reduction on their tax bill.
Contact Nushrat Rahman: nrahman@freepress.com; 313-348-7558. Follow her on X, formerly known as Twitter: @NushratR.
This article originally appeared on Detroit Free Press: Wayne County taxpayers have until April 1 to avoid tax foreclosure
