Wayne County accused of keeping foreclosure sale profits

[Jimaz]

Wayne County accused of keeping foreclosure sale profits

A class action lawsuit against the Wayne County Treasurer's Office alleges the county is not properly refunding some residents who lost their homes because of unpaid taxes.

[Cincinnati_Kid]

Not surprising to me, especially if this was going on during the housing crisis of 08-09. Thousands of people lost their homes to foreclosure.

[EASTSIDER BALDUCK]

Wayne County
Compete incomitance. It has been that/this for years 50+.


Other than lawyers in GP or other spots, they get away with it.

[JBMcB]

In civil court it would be called unjust enrichment. In criminal court it would be called theft by conversion. In either case, it means someone is taking the value out of something they don't own and aren't entitled to.

For example, if you owe the bank $8000 on a truck loan and you default, they can repossess the truck and sell it for $8000 to recoup what you owe them. If there is $4000 worth of building materials in the bed, they can't sell those and pocket that money as well. They get $8,000, anything more than that they owe you. This is all well established codified law and case law, and covers *everyone*

The fact that city government is populated with a whole bunch of lawyers, and they don't understand that they can't profit from tax sales is dumbfounding. For governments, there is an amendment that covers these cases as well as all the codified law and case law. It's crystal clear. In cases of debt, you can recover what you are owed, occasionally a little extra to cover the cost of recouping that debt, and not a penny more.

Every city and county official who doesn't understand this very basic concept in law needs to be fired.

[Johnnny5]

Unlike many issues affecting Wayne County residents, this had nothing to do with incompetence or corruption. This was standard practice for tax sale proceeds statewide in Michigan for a very, very long time. It only recently changed due to a court case that decided the practice was illegal.



https://www.freep.com/story/news/loc...s/74593584007/

[ABetterDetroit]

Unlike many issues affecting Wayne County residents, this had nothing to do with incompetence or corruption. This was standard practice for tax sale proceeds statewide in Michigan for a very, very long time. It only recently changed due to a court case that decided the practice was illegal.



https://www.freep.com/story/news/loc...s/74593584007/

This is 100% Correct. Blaming Wayne County for doing the exact same thing that every county in Michigan was doing under laws enacted by the State of Michigan is pointing the finger in the wrong direction.

[Richard]

Yes the state of Florida passed laws concerning this long ago.

But how the cities get around it in most cases is with using code enforcement and the placement of liens,which can quickly run over the value of the property and they retain the right for 1st in line for that lien payment.

So when the house goes to tax foreclosure,what it brings may still not cover the lien amount which you may not end up with anything anyways.

So as an example,I have $750k in CE liens on my house,so if it went to tax auction the city by default gets paid first,so there would be nothing left to recover.

In order to counter that ,the state passed a cap on how much they can actually collect as long as the house is your homestead,the $750k is only a number on paper,the maximum they can charge is 15% of the property appraised value at the time the lien was established.

In my case that is like $6k so even if it went to tax foreclosure,the value of the house exceeds the tax arrears but I do not lose the built up equity in the house.

Its actually a constitutional thing that prevents the government of taking your house without just value in return.

The moral of that story,which is true,when you go to the state and have them put those protections in place,if you do not also restrict their ability to use CE to place the liens in excess of the value of the home that deprives you of its value.

You have not accomplished anything.

It’s a two part process.

Also if you lose your house to a tax foreclosure,you still have 1 year after the sale to come up with those funds and they have to return the property to you.

Florida has the strongest home owner protections in the country,the only person that can take you house is the mortgage company or tax sale,you can never have your house taken over a lawsuit judgement or any other reason.

It is important for Detroit because you do have a lot of low income residents living in paid for generational housing.

Without those protections you are going to have them homeless for stupid amounts of money comparatively and it is going to cost the city and taxpayers more money to support them with other housing options.