New law to help families facing property tax foreclosure
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EmailOn January 14, 2015, Governor Snyder signed a new bill to help homeowners, especially in Detroit and Wayne County, stay in their homes.
In a move to avoid an upcoming tax foreclosure crisis, primarily in Wayne County and Detroit, the Michigan legislature passed a new bill allowing county governments to negotiate repayment plans with homeowners who have delinquent property taxes. In the past, the rate of interest and penalties charged was a set rate; now, if homeowners agree to participate in a payment plan, the county treasurer can waive some or all of that interest.
According to David Szymanski, deputy treasurer of Wayne County, qualifications for the plan include having a principal residence exemption filed with the city. This means they have to occupy the property as their primary residence. In addition, homeowners have to make a 10 percent down payment toward paying down the tax bill.
While this can help any homeowner facing financial hardship and having difficulty paying their property taxes on time, it is especially critical in Detroit and Wayne County. There are over 76,000 homes facing foreclosure with 62,000 of them in Detroit. If all of those homes went into foreclosure, it could cause a waterfall of vacant properties that would seriously threaten efforts to bring stability back into the metro Detroit area after the recent recession.
Another benefit, specifically to homeowners in Detroit, is the recent announcement from by Mayor Mike Duggan that tax assessments are being reduced in most neighborhoods by as much as 20 percent to bring taxable values in line with actual market values. The hope is that with reduced taxes, more homeowners will be encouraged to pay their taxes as they are now affordable. “We think we are going to significantly reduce the number of people who can’t pay their tax bills going forward,” Duggan said.
Due to Michigan’s designation as a Hardest Hit state, they received monies from the federal government to help homeowners stay in their homes through several funds set up precisely for this purpose. Named the Step Forward Michigan program, it has helped over 22,850 homeowners affected by the recession catch up on delinquent property taxes as well as past-due mortgage payments. Those funds are dwindling now, but there are still homeowners struggling to catch up and maintain housing payments. To see if you qualify, visit their website at StepForwardMichigan.org. Michigan State University Extension has certified housing counselors who can assist you with the process. You can find a housing counselor near you by visiting our website, MIMoneyHealth.org.
