Wayne County residents unnecessarily losing homes to foreclosure

Thousands of Detroit and Wayne County homeowners face tax foreclosures. Some of those families still have time to save their homes, but they might be paying more in taxes than they should have had to pay.

Cheryl West has been living in her home for 60 years. Her family bought it when she was eight years old. It’s near the historic Boston-Edison neighborhood in Detroit. But she lost it to tax foreclosure before she learned all her options.

“The house had already gone for eviction, that I was to be evicted from the home. By that point it had gone for auction,” she explained.

She now rents the house, but she suspects the landlord will evict her and move into it.

All indications are that West never should have lost the house. She lives on her Social Security check. People with incomes near poverty can get a poverty exemption on their taxes.

“I found out at the very end zone that, in fact, I should have been eligible for the exemption for property taxes and no one told me that," she said.

And advocates say a lot of people lose their homes because they don’t know they can challenge their property tax assessment.

David Mitchell is a member of the group Detroit Eviction Defense. He says as property values have plummeted, tax bills should have gone down too.

“It’s the county that has never reassessed these properties, that is charging people for thousands of dollars over what their actual taxes should be and saying, ‘Oh, we messed up? That’s too bad. You’ve still got to pay or you’ve got to leave your house’” Mitchell said. Detroit Eviction Defense has been calling for a moratorium on tax foreclosures.

Wayne County Treasurer Raymond Wojtowicz says he can’t do that.

“It isn’t within our authority. It’s a higher public service organization, legislative specifically, that can only attain that goal for those people,” Wojtowicz said.

“They need to go talk to the state legislature? Fine. They need to go talk to the governor? Fine," Mitchell responds, “but, at the end of the day they’re not doing enough to get what we need, which is a moratorium and a halt to these foreclosures until they can figure out what’s going on.”

The county treasurer’s office says there are many programs in place to help people, but it cannot retroactively adjust assessments and it cannot retroactively grant people a poverty exemption. That’s something homeowners have to do before foreclosure.

Frank Alexander is a law professor at Emory University. He helped draft Michigan laws that help homeowners struggling with mortgage and tax foreclosures. He says more needs to be done to prevent foreclosures and keep people in their homes.

“Michigan doesn’t have adequate circuit breakers to create exemptions for owner-occupied property, particularly the low income, low-to-moderate income owner-occupied property. They should not be paying significant property taxes," Alexander said.

Changes to state law have helped some people avoid foreclosure, for now. New low-interest payment plans have cut Wayne County’s foreclosure list from 22,000 owner occupied homes to 4200. More people still can make those kinds of arrangements if they get into the treasurer’s office before June 8th.

But, there will still be a lot of families who’ll lose their homes, and this is not a one-time event.

Jerry Paffendorf is with Loveland. It gathers data on property. “Unless something systematically different happens, this is will not be the last year of tax foreclosure at this scale. I think it’s important for people to understand this is not a solved problem because we’re flushing out the system, so to speak,” Paffendorf said.

The Wayne County Treasurer’s office confirms next year could be just as bad.

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Tue, 05/26/2015 - 10:22am
In order to determine the author's point of view, Is there a point where people who can't take care of their kids, can't afford basic maintenance on a house, are unable to manage the bills and other financial matters that come with being a home owner, are these folks really being better served, as well as society in general, by keeping them in a home as an owner occupant?
Tue, 05/26/2015 - 10:32am
Just remember that if assessments are cut then the amount of tax dollars collected by the city or county is cut. From what I read, neither the City of Detroit nor Wayne County can afford less revenue. Lowering the valuation on a property won't save a great deal of money for a taxpayer. Plus keep in mind that when you go to sell the home the valuation will be a starting point for what you can ask. As for the poverty exemption, this must be filed each year and detailed financial information must be provided. The Board of Review then looks at that information and decides if it should be granted. Oft times you find people filing for this exception who are shelling out a couple hundred per month for cable and another hundred and fifty for cell phone service. Such people can afford to pay their property taxes but choose not to do so.
Tue, 05/26/2015 - 1:34pm
And these same people with cable and pricey cell phones want free water on top of it.
Charles Richards
Tue, 05/26/2015 - 1:48pm
Why is everything always a matter of reaction, and generally a reaction that occurs too late to be of much value? Did this situation just occur to Mr. Graham? It has been known for sometime that assessments were way out of line with market values. And if Messrs. Graham, Mitchell and Professor Alexander were aware and so concerned about this situation, why didn't they advocate that taxing entities include clearly written explanations of the procedures for appealing assessments and the many programs available for tax relief? But of course that wouldn't have given them an opportunity to crusade for "social justice." Professor Alexander reveals his objective when he says of "low income, low-to-moderate income owner-occupied property" owners that "They should not be paying significant property taxes." And it is not as if nothing has been done about tax foreclosures. As Mr. Graham says, " New low-interest payment plans have cut Wayne County’s foreclosure list from 22,000 owner occupied homes to 4200." That is a considerable achievement.