The Michigan’s Property Tax Foreclosures Were Being Addressed in the Legislation
Gov. Gretchen Whitmer just passed a bill in the Michigan State Legislature, which contains the reduction of interest rates on the property taxes that were deemed delinquent and also allowing the county treasurers to work directly with homeowners and implement payment plans.
The said law was originally set to expire on the 30th of June, 2019, but was extended until 2026.
Perhaps you may have heard of the term IRSPAs or the Interest Reduced Stipulated Payment Agreements? This is actually an agreement that is only available to people who own their primary residence.
Now, let’s go back to the IRSPAs. This is said to have an interest set at 6%, while in comparison, the average interest rate on the delinquent property taxes within the state of Michigan is 18%.
Eric Sabree of the Wayne County Treasurer made a statement on the Michigan Radio, that the law has been reduced to the amount of tax foreclosures in his county. The amount of tax foreclosures stated mentioned was around 14,000 county homeowners who are currently on the IRSPAs.
Sabree also made mention that the Wayne County is not the only county that uses the IRSPA to help taxpayers. However, the majority of these tax payers who took advantage of this plan are from Wayne County.
Take note that the property tax delinquency and foreclosure have been the major issues in Detroit. Based on the recent study done by Quicken Loans, the property tax foreclosures in Detroit are at a 14-year low. Back in 2018, there were 2,920 properties that were facing the property tax foreclosure auction, but the figures were lower compared to the ones in 2017, which was about 6,052, and is also way far below the peak of 15,000 back in 2015.
The Quicken Loans have stated that as of last year, there were 21% of homeowners that were unaware that their property was behind on property taxes, and another 61% of renters in a tax-delinquent properties were also not aware of their home’s tax status.
This statement from Mayor Mike Duggan is quoted below:
“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.”
The mayor further added, “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.”
Though the outreach programs have helped improve the Detroit’s tax foreclosure issues, but the city still has to face other foreclosure-related challenges. In fact, according to the GoBankingRates and the data from Zillow, 34.4% of the homes in Detroit are currently underwater. The median home value at the Detroit-Warren-Dearborn metro area level is $161,300, which is quite far below the national median of $226,300. Detroit is second on the list of US cities that are most likely to face housing crisis – according to the GOBankingRates.
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