Michigan Senate Adopts Reforms to Foreclosures Michigan Property Taxes

(The Center Square) – On Thursday, the Michigan Senate passed laws to prevent local governments from benefiting from foreclosures on home taxation.

In 2014, Oakland County seized the home of retiree Uri Rafaeli in 2014 $ 8.41 of initial overdue property taxes and sold the property for $ 24,500 – more than $ 35,000 less than Rafaeli paid for it – and then pocketed $ 24,214.

Rafaeli went away empty-handed.

If required by law, Senate Act 676 and Senate Act 1137 will bring Michigan tax law into line with the Michigan Supreme Court ruling that has been ruled unconstitutional in what critics call “home theft.”

Michigan Supreme Court in July ruled Local governments’ withholding excess tax foreclosure sales in excess of the amount owed constituted “unconstitutional income without fair compensation.”

The first bill, sponsored by Senator Peter J. Lucido, R-Shelby Twp, aims to allow people to claim the remaining proceeds from the sale of foreclosed property through the judge who ordered foreclosure.

According to current tax law, excess funds from property sales must be deposited with the district treasurer.

Once a judge determines the amount owed an applicant, the district treasurer would pay the funds within 21 days. Anyone with an interest in the property can make a claim on the remaining sales proceeds after the required taxes, interest, penalties and other costs have been met.

Lucido previously told The Center Square that the law he is about to pass brings justice to foreclosure – “What does the law need to be to protect the individual and his economic reality?”

“It literally adds the level of protection that the Supreme Court has found necessary. If I own property and for some reason I have a mortgage foreclosure or tax foreclosure, I should be entitled to the excess proceeds, not the county in which the foreclosure took place, ”Lucido said.

The second bill aims to improve the foreclosure notification system so that the owner is aware of the possible foreclosure, rather than notifying a renter in a rental property.

SB 1137 aims to obtain a foreclosure notice on the forfeited property, a notice of a reason for issuance and a foreclosure negotiation to explain the right of a person interested in the property to assert that person’s interest in any remaining proceeds after a foreclosure sale or transfer close .

Senator Jim Runestad, R-White Lake, sponsored the second bill.

Runestad previously told The Center Square that some homeowners were in a nursing home, were illiterate, or for some other reason fell back on their property taxes and lost their home.

“We’re trying in every way … to make it more user-friendly for those who are late with their property taxes,” said Runestad.