More than a dozen Michigan counties may have illegally pocketed money from foreclosure sales that should have gone back to the taxpayer, a series of class action lawsuits claim.
Many Michigan homeowners lost their property after the county foreclosed on their homes. The foreclosures were a result of unpaid taxes by the homeowners.
The counties named in the lawsuit allegedly sold the homes to cover the delinquent taxes, as they should have, but then they pocketed the overages for county coffers, the class action lawsuits allege.
In a class action lawsuit filed in Michigan’s Leelanau County, a homeowner claims they owed a mere $10,000 in delinquent taxes. The county allegedly sold the home, which had a fair market value of $180,000, and the owners have not seen any of overage.
Donald Visser, a lawyer representing the plaintiffs in many of these foreclosure funds cases says that they are not contesting the collection of delinquent taxes, but they do want to know where the rest of the money went in these sales.
“They knew they should return the funds, and they didn’t,” Visser told local news source 9&10.
Michigan’s Supreme Court has already weighed in, finding that it is unconstitutional for counties to retain the difference between what they got in foreclosure funds and the amount the homeowner owed in taxes.
Despite Supreme Court ruling, Visser reportedly says that efforts to recoup these funds have been “[u]nsuccessful.”
As many as 43 total class action lawsuits could be filed against Michigan counties and their treasurers over the allegedly misappropriated foreclosure funds, Visser told 9&10 reporters. The legal actions will take place in state and federal court, he said.
“It is a widespread policy, because that’s the way the state legislature set it up. So all of the counties have been operating under that statute,” Visser explained to 9&10. “If the federal cases proceed forward, the state cases would be put on hold. If the federal court ultimately would decide not (to take up the issue) … then these cases would go forward in the individual (Circuit) courts.”
Did you lose your home to foreclosure in Michigan due to unpaid taxes? Did you see any equity from the sale of your home? Tell us about your experience in the comment section below!
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One thought on 19 Michigan Counties Accused of Pocketing Foreclosure Funds, Class Action Lawsuits Claim
This happened to my husband and I in 2020 and we have not received any of the overages which is around $50,000. We don’t have money up front for an attorney so we don’t know what to do.