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A local unit of government obviously has more control with respect to foreclosures resulting from unpaid taxes. In cases where poverty is the underlying problem (as opposed to a catastrophic event such as a job loss), there are instances where local governments can alleviate the tax burden. The General Property Tax Act allows for a reduction of the real property assessment for individuals who meet federal poverty guidelines or more generous standards set by the local unit governing body. MCL 211.7u. These are applied for through the Board of Review.
The Act also allows for the foreclosing governmental unit (the county) to withhold properties from the petition for foreclosure for persons undergoing substantial financial hardship. MCL 211.78h. Finally, the Act also provides that the increase in assessment of home repairs and maintenance shall not occur until a home is sold. MCL 211.27.
Municipalities are addressing mortgage foreclosure and tax reversions with outreach, education, and referrals for service, too. Detroit has adopted an ordinance on property tax education and foreclosure avoidance. Grand Rapids offers information on financial crises leading to mortgage foreclosure. Due to the enormity of the mortgage foreclosure problem, some counties are providing strong responses by developing educational materials.
Detroit Available at www.municode.org
The city passed a Property Tax Education and Foreclosure Avoidance Program
ordinance. Before reverting the taxes to the county, the city may mail
an informational brochure with the property tax bill stating the tax
deadlines and consequences for failure to meet the payment deadline,
a summary of current tax foreclosure law in plain English, and provide
a list of resources available to qualified taxpayers which includes principal
residence credit, hardship exemption, and payment options and deferments.
Also included is a list of organizations providing housing services.
Grand Rapids (www.ci.grand-rapids.mi.us)
The city offers contact information for the following three organizations on its web site under “Help! I have a financial crisis and can’t make my mortgage payment.”
1) Home Repair Services of Kent County Foreclosure Intervention Program—This
housing counseling program focuses on assisting homeowners who are threatened
with the loss of their home through foreclosure and/or have been victims
of predatory lending practices.
Genesee County (www.thelandbank.org/aboutus.asp)
The Genesee County Land Bank was formed to return foreclosed property to the tax rolls and further develop property within Genesee County. Its mission is: “To manage land obtained through foreclosure, gift, or purchase in such a way as to return those properties to the tax roll, when appropriate, to a higher and better condition than when received.”
The county also has a Foreclosure Prevention Program, which is a collaborative effort between the Land Bank and the county treasurer’s office to prevent tax foreclosure on homes. The foreclosure law allows the county treasurer to postpone foreclosure for a home owner facing a ‘substantial financial hardship.’
Oakland County (www.oakgov.com/chi/housing_counsel/mortgage-tax_foreclose_2.html)
The Oakland County Community and Home Improvement Division’s
Housing Counseling unit offers free housing counseling services to county
residents. Funded by a Comprehensive Housing Counseling Grant and Community
Develop Block Grant funds, the unit is approved by HUD to provide counseling.
Services include: mortgage default resolution services, including delinquency,
default or foreclosure problems; information on government subsidies
for rent and/or purchase programs; and reverse mortgage counseling to
allow seniors to stay in their homes and maintain a decent lifestyle.
The Washtenaw County Treasurer won a 2007 Achievement Award from the National Association of Counties for foreclosure prevention programming. The county has a Foreclosure Prevention Task Force created in conjunction with their MSU County Extension office and the Housing Bureau for Seniors. The Task Force sponsors a mobile information and education service offering credit and mortgage counseling; free credit reports and scores; a home buying seminar; referrals to local resources; and foreclosure prevention information. It also has easy-to-read information posted on its web site under: “What To Do When You Can’t Make Your Mortgage Payment.”
Contact: Information & Publications Division