Wayne Co. foreclosures, Detroit evictions halted amid outbreak

Christine MacDonald
The Detroit News

Officials announced Monday they'd halt all Wayne County foreclosures this year and suspend evictions in Detroit, in hopes of keeping people in their homes during the coronavirus health crisis. 

Wayne County County Treasurer Eric Sabree said Monday his office won't foreclose on any properties this year because of the outbreak. 

"In light of the rapidly changing recommendations on social distancing ... and the increasing economic uncertainty we are all facing, I have had to make an urgent decision to protect all the taxpayers facing foreclosure in Wayne County," Sabree said in a statement.

"Given the fact that all taxpayers will be facing economic hardships in the coming months, I have made the decision to withhold all properties from the 2020 foreclosure petition."

The treasurer's office is closed to the public through April 3 in hopes of stemming the spread of the virus.

Oakland County Treasurer Andy Meisner pledged last week that no one would lose a property to tax foreclosure if they have been affected by the coronavirus. And Macomb County Treasurer Lawrence Rocca announced Monday afternoon that he would extend the redemption deadline to April 15, except for properties cited as a "public nuisance."

The Oakland County Treasurer's office is closed to the public and Macomb's is only open for appointments. 

Also on Monday, Detroit's 36th District Court announced an immediate moratorium on evictions. 

“This is a difficult period for our entire community, and in an effort to avoid any additional hardship for those affected, it is important that we halt residential evictions at this time," Chief Judge William C. McConico said in a statement.

 A coalition of legal organizations and community groups had called for the moratorium earlier in the day "due to the ongoing public health crisis created by the COVID-19 pandemic."

Roughly 10,000 Wayne County properties were facing the annual tax foreclosure auction this fall, including about 3,200 occupied homes, according to Sabree's office. Those numbers typically decline by the summer as owners restart or get on new payment plans. 

A property is considered foreclosed by April 1, after a tax bill goes unpaid for three years and a circuit court enters a judgment of foreclosure. But Wayne County has allowed owners to redeem their properties through the summer. Tax foreclosed properties are sold at auction in the fall. 

Margaret Dewar, a University of Michigan professor who studies tax foreclosure, praised the decision. 

"In this emergency, people need to be able to stay in their homes," Dewar said in an email. "Tax foreclosure would have threatened owner-occupants and renters with losing a place to stay and would have increased their risk of contracting the coronavirus and spreading it to others."

But Michele Oberholtzer, director of Tax Foreclosure Prevention for the United Community Housing Coalition, said the group doesn't support a halt to landlord foreclosures. The nonprofit runs a program that helps renters buy their landlord's foreclosed homes but many will remain in limbo because of the decision. 

"Landlords will get another year of collecting rent and eviction rights without paying taxes," Oberholtzer said. "There isn’t a one-year moratorium on rent payments."

Sabree urged homeowners to keep paying on their payment plans, in part because interest will continue to build. 

"Taxpayers must know that although the property is not facing foreclosure, delinquent taxes still must be paid," Sabree said. 

Sabree said his office will move ahead with getting owners signed up for "Pay as You Stay," a new program that will wipe away much of the delinquent tax debt for thousands of low-income Detroit homeowners who qualify. Sabree said his office will be contacting those who eligible starting in April. 

Detroit homeowners first have to apply for this year's city Poverty Tax Exemption, also called the Homeowners Property Tax Assistance Program or HPTAP. That would either wipe away or discount their 2020 tax bill.

Foreclosures of occupied homes have declined dramatically but many are still struggling on payment plans. Nearly one in four Detroit homeowners owes more in delinquent property taxes as of fall 2019 than they did three years prior, despite being a part of low-interest plans designed to help them get out of debt and avoid foreclosure, according to Detroit News analysis. 

The News' investigation also found that Detroit overtaxed homeowners by at least $600 million after it failed to accurately bring down property values in the years following the Great Recession. 

Of the more than 63,000 Detroit homes with delinquent debt as of last fall, more than 90% were overtaxed — by an average of at least $3,700 — between 2010 and 2016, according to calculations by The News. The debt owed on about 40,000 of those homes is less than the properties were overtaxed over those seven years. 

Euvondas Royster, who filed bankruptcy in 2019 because of property tax debt on her family home, said she hopes the city uses the extra time to find a way to reimburse homeowners who were over-assessed. 

"They need to figure out this overtax issue," Royster said. "Leave people alone with these foreclosures.

"They owe us money."