Michigan steals home over $8 in interest

Michigan steals home over $8 in interest
0

#21

If that is the case, wouldn’t that be effectively punishing others who have been paying their taxes if they raise the rates to make up for the decreased assessments?


#22

It punishes people who don’t fight their property tax assessment increases.


#23

Kind of but not really. If everyone successfully fought their assessments, the net result would be no benefit from fighting. The benefit from fighting is to lower your assessment’s percentage of the total tax base.


#24

Ok so in this very example if Michigan law require the equity to be rturned to the owner this guy would have had his $60k house foreclosed for a $8 debt and he’d get a check for $24k at the end of it.

A penalty of $36k over a $8 debt. And the government get what?.. $8 net?

Thats just stupid.


#25

I don’t know how much of a discount foreclosure sales incur, but IF it was a fair price (or close to that) for the house sale, the $36k was already lost from a poor investment.


#26

Stupid? Sure, it’s stupid - but if you let it go that far, you deserve what’s coming.

Besides, you’re only calculating that off the original purchase price - anyone who’d get themselves in that hole is the kind of person who was likely conned in to drastically overpaying for this “vacation home” in the first place. Dont ignore the warnings and pay the damn $8. I’d bet nearly anything that he was intentionally not paying that $8 on the principle that he’d already paid them more than was “fair”, assuming they’d just “write off” the debt and not do anything over such a small amount. Exactly why they need to act on small amounts no differently than large amounts.


#27

Nobody deserves to lose $24k because they failed to pay $8.

Or $12k or 6k or 3k…

Its assinine of our government policies to be so punitive. This is like 5 years prison time for jaywalking.

The government probably spent $80 sending him notices.

Yeah definitely the guy was probably completely negligent in not getting the notices. He probably had the notices sent to an address he didn’t check or something. (his lawyer didn’t explain that detail in the op-ed).
so fine him $80 or $160 or whatever and put a lein on the property. When he dies they get all the money plus interest.


#28

Its in Detroit. The foreclosures in Detroit sell for nothing. Because its Detroit.
We don’t know what the fair market value of the home would be otherwise. But the amount they can get at foreclosure is drastically lower than a normal sale.


#29

This is the property :


It was auctioned in August 2014 :

Zillow lists a value ~$80k back in August 2014 and estimates it at $141k today

Of course we know Zillow isn’t super accurate. But homes on that block have sold for $78k, $89k, $130k in 2018.


#30

Southfield is the southern-most city in Oakland county, butted up against 8 Mile Rd (yes, like Eminem’s song), which is the county line between Oakland county to the north and Wayne County to the south (where Detroit actually is). The Detroit Metropolitan area is usually considered to be Wayne, Oakland and Macomb counties. The property in question is literally 1/2 mile from the county and city line, so just a stone’s throw outside of Detroit - but it is not in Detroit.

Per their Wiki, “Oakland County is among the ten highest income counties in the United States with populations over one million people.” Oakland county’s median household income is right around $100,000, while Detroit’s is just over $25,000 (a 4-to-1 ration). The median across the state is about $50,000 - and that’s right around where Southfield lies as well.

As you can see, comparing Southfield to Detroit is like comparing apples to oranges. Please don’t allow their proximity to one another as allowing Detroit’s housing problems to cross over that county line.

And yes, I agree that the actions of this article are unfair (one-sided as the article is). I seem to recall that there used to be a window of time, even after a tax sale, that the old owner could pay off the back-taxes and get their property back (we’re talking months, not days or weeks, IIRC). It’s been a while, so that certainly could be different today. That being said, from everything I’ve ever heard, there is typically plenty of notice to the homeowner before anything like this gets started - it’s not a quick and dirty process - we’re talking multiple years from start to finish. If this homeowner didn’t get the notices, they really are at fault and should be held responsible, but still, this seems excessive…


#31

Mandatory Michigan sucks post from an OSU alumni but in this case, they truly do.

Ohio (and other states) changed its laws last year so that a criminal conviction is now needed to use the civil forfeiture law (for penalties under $15k). I think if there was political will to curb the most outrageous exploits, something like this should be the bare minimum along with closing the equitable sharing loophole.

Ideally, just prohibit civil forfeiture and equitable sharing entirely like some states already have. It’s mind-boggling to me how it is legal to completely bypass due process like this.


#32

Just a minor point of contention here. @Shandril I’m not calling you out specifically because you are using the same terminology that @xerty used, and he took it directly from the article in the Wall Street Journal.

When shandril mentioned criminal convictions, that’s what made me do a double take on the term being used here. I don’t think “Civil Asset Forfeiture” is the right term to use to describe what happened in this case. Civil forfeiture is generally used to describe when the police take something of value from a suspected criminal that they can argue was used or purchased as part of the criminal act. That is not what happened here. There was no crime or suspected crime. I think “Tax Lien Foreclosure” is the best way to describe what Oakland County did. I don’t know the term for what they did by not returning the surplus to the homeowner other than “wrong.” Shame on the Wall Street Journal for calling this Civil Asset Forfeiture though. Poor reporting and editing.


#33

Great point!

I got mixed up. Civil asset forfeiture is when police stops you and suspect that you have cash or assets linked to a crime and steals them without having to do due process. That’s been exploited by police departments to get slush money but clearly it’s different from the tax lien foreclosure in this article.

Thanks for the correction. Although I still stand by my statement about civil asset forfeiture.

One thing I’m not clear about in the article is also how come it went several years without notification to the homeowner, including when the state first put judgement lien on the property? And even then, once the property is put up for tax deed sale, doesn’t the homeowner have a period to redeem the tax lien? So you’d have to underpay taxes, fail to follow up, not notice the judgement lien, and then not try to redeem the lien when you get notice of tax foreclosure sale. It can all happen I guess but it’s not an overnight process.


#34

Thanks for the clarification.

I thought I’d read that Detroit is in the county in question so I had assumed the property in question is. But county and city borders often overlap partially.


#35

Thus the claims that this was a very slanted article, having left out that nasty little detail. The concept itself deserves legitimate criticism, but the individual incident was completely avoidable and no-one’s fault but the homeowner.


#36

For me, where a lot of criticism falls may be in the process and accounting for taxpayer circumstances and failures in communication. It varies from state to state obviously but if you are short $8 in taxes after making two payments, the right thing to do would be to notify the taxpayer that they have overdue taxes left. Letting it fester for several years accumulating interest is a bit unfair especially at the way-above-market interest rate they charge. That almost feels like keeping quiet about it is an intended way to rack up taxes. In this example, if the elderly person underpaid, tried to pay it off when they noticed, at their age, it’s not unusual to forget about interest accrued also being due. Yes it’s their fault for underpaying and also for not making sure their second payment expunged all tax, penalties, and interested owed but it’s clear to me that had they been notified of the $8 delinquency, they would have paid it as soon as possible to avoid further interest.

Take another situation where you can get foreclosed, this time by your lender for failure to make mortgage payments. You’ll hear about being behind on payments, many times from the lender and/or a collector before you get foreclosed leaving you enough time to correct an honest mistake. But when it comes to the state treasurer, the follow up and communication part seem to be (intentionally?) absent.

The final straw is really the part where the proceeds from the foreclosure in excess of the tax + penalties + fees owed are not returned to the homeowner. The optics on that really do not look much different from that of your average loan shark.


#37

I don’t see anything that says that the county was actually keeping quiet about it.

They are legally required to send notices through the process. Nobody said they didn’t…

It is assumed the property owner didn’t get the notices. He probably had the wrong address filed or something similar. And apparently his renters didn’t bother to tell him about the foreclosure notice posted on the property door. (?)


#38

I don’t live in that state up north and have not had first-hand experience in this matter. The IRS will notify you but I’m not sure that the state treasurer needs to notify the homeowner that a tax lien was filed for unpaid taxes. The lien becomes public record and you may notice on your credit report or when getting your next year tax bill. But those are indirect ways to find out about it.

It’d just seem improbable to me for someone who made an attempt to satisfy the debt to totally ignore delinquency, collection, lien and tax deed sale notifications over the span of several years. Maybe this person was just very unlucky and very negligent but the fact that it appears to not be an isolated case (like the article alleges) make that seem not that likely.


#39

Michigan law requires that they notify property owners when they’re delinquent. It also requires more than one notification about a foreclosure event.

In the case in question the property was a rental owned by an LLC. SO who knows where the mail might have been going.

and yes he was unlucky and/or negligent

The opinion article written by his lawyer never complained about a lack of legal notification so that is proof to me that he got legal notifications. If he hadn’t gotten the required notifications then the foreclosure would be illegal to begin with and the lawyer would have made that argument.

I assume that more frequently foreclosures due to tax delinquencies are for significant tax debts that the owners can’t pay and little equity.

The article only cites 2 examples and very likely the 2 very worst examples in the state in recent years.


#40

I’m assuming that there was at least one (and presumably numerous) notifications between the time his last check was paid and the house being gone, which were ignored. If they really kept the fact he had a remainder due a secret until the foreclosure process was completed, that’d be another issue altogether. But as long as there was at least some notification at least of the pending foreclosure action, the fact the unpaid balance was only $8 makes me even more unsympathetic towards the homeowner - although the blame for not paying in the first place remains the same, it’d be easier to understand not being able to come up with an unexpected 4- or 5-figure payment on a short deadline.