Senate committee hears testimony from Pacific Legal on property tax foreclosure concerns

LANSING, Mich. — The Senate Finance Committee heard testimony Wednesday from Pacific Legal Foundation on how best to protect residents and the most vulnerable during foreclosure.

“Today’s testimony clarified a way forward for the state to help ensure that local communities comply with the law and help residents stay in their homes,” said Chairman Sen. Jim Runestad, R-White Lake.

The Michigan Supreme Court ruled last week that in property tax foreclosures, the individual is entitled to foreclosure sale proceeds in excess of the taxes, interest, penalties and fees owed.

Christina Martin, an attorney for Pacific Legal Foundation, the group that brought the suit against Oakland County, updated the committee Wednesday on the conclusion of the lawsuit and advised members on the need for legislation to bring the foreclosure process used in all 83 counties into compliance with the court’s ruling.

“We are glad the Michigan Supreme Court has ruled for our clients and stopped counties from unjustly and unconstitutionally taking more than they are owed from property owners,” Martin said. “We are glad to see Chair Runestad and the Finance Committee working to design a system that protects constitutional rights, and we are happy to offer our help.”

Runestad said Senate Bill 891, which he sponsored, and Senate Bill 676 — both before the committee — will play a part in addressing some problems in current property tax foreclosure law.

“Most property tax foreclosures are on homes with full equity, where an individual is ill or under hardship and they fall behind, often after paying taxes their entire life,” Runestad said. “In many cases, they no longer have a mortgage because the home is paid for and they aren’t budgeting for property taxes or can’t pay them. In these cases, it is wrong to take all of the equity in a foreclosure. Foreclosure should be avoided at all costs to keep people in their homes.”

The committee is expected to hear further testimony on SBs 891 and 676 in the weeks ahead.