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MICHIGAN
Addressing Property Tax Foreclosures
e Michigan State Legislature has passed a bill, signed
by Gov. Gretchen Whitmer, which reduces interest rates on
delinquent property taxes and allows county treasurers to work with
homeowners and implement payment plans. e law was originally
set to expire on June 30, but was extended until 2026 through the
passage of this bill.
Interest Reduced Stipulated Payment Agreements (IRSPAs) set
interest at 6%, while the average interest rate on delinquent property
taxes in Michigan are 18%. Wayne County Treasurer Eric Sabree
said on Michigan Radio that the law has reduced the amount of
tax foreclosures in his county, stating that around 14,000 county
homeowners are currently on IRSPAs.
"Wayne County's not the only county that uses it to help
taxpayers, but the majority of taxpayers that take advantage of this
plan are from Wayne County," Sabree said.
Property tax delinquency and foreclosure have been particular
issues in Detroit. According to a recent study from Quicken Loans,
property tax foreclosures in Detroit are at a 14-year low. In 2018, 2,920
properties faced property tax foreclosure auction, down from 6,052 in
2017, and far below the peak of 15,000 in 2015. Quicken Loans states
that, as of last year, 21% of homeowners were unaware their property
was behind on property taxes, and another 61% of renters in tax-
delinquent properties were unaware of the home's tax status.
"As Detroit comes back, we need to do everything we can to
make sure those who stayed in our city through good times and bad
are able to stay in their homes," Mayor Mike Duggan said. "We
are seeing real progress in tax foreclosure reductions that impact
all of our neighborhoods, and through programs like Neighbor to
Neighbor, we will continue this important work in close partnership
with the community."
Although outreach programs have helped improve Detroit's
tax foreclosure issues, the city still faces other foreclosure-related
challenges. According to GOBankingRates and data from Zillow,
34.4% of homes are currently underwater, and the median home
value at the Detroit-Warren-Dearborn metro-area level is $161,300,
far below the national median of $226,300. GOBankingRates puts
Detroit second on its list of U.S. cities most likely to enter a housing
crisis.
