‘In Detroit, there’s a budget line every year for expected windfalls from home foreclosures….’
(Joshua Paladino, Liberty Headlines) The Pacific Legal Foundation challenged Michigan’s “predatory home equity theft policy” in court on Tuesday after Wayne County seized a family home due to $144 in unpaid taxes.
Officials in Wayne County, which encompasses Detroit, took Erica Perez’s home there in 2017, sold it for $108,000, and plundered $107,498.55 despite the back taxes amounting to less than $150, PLF reported in a press release.
PLF, which represents Perez pro bono, sued Wayne County and County Treasurer Eric Sabree in the Wayne County Circuit Court.
“Although the government can take a property to settle debts, it can’t take more than it’s owed,” PLF attorney Christina Martin said.
“For most people, the equity in their home represents their life savings. Home equity theft—which is what Wayne County has committed—is unconstitutional, and the courts need to end the practice.”
Perez and her family moved to Detroit to live nearer to her father once he retired.
With their savings, the Perez family purchased a property that had a four-unit home and a single-family home. They renovated the four-unit complex during a three-year period and then started renting it. Then they began to renovate the single-family home.
Wayne County officials swept them off their feet in 2017, informing the Perez family that they were seizing their home.
The Perez family had committed the apparently life-altering crime of underpaying their 2014 taxes by $144.
“We’ve always believed that if you work hard for something in this country, you can achieve it,” Perez said. “That’s why this house was so important to us. We were literally trying to live the American Dream.”
It’s unclear why the Perez family did not receive notices from Wayne County that informed them of their unpaid taxes, but similar seizures have happened throughout Michigan, pointing toward a systemic legal issue.
PLF said local governments engage in this abusive practice for two reasons:
First, “Local governments can pad their budgets with stolen equity. In Detroit, there’s a budget line every year for expected windfalls from home foreclosures.”
Second, “Some politicians use the system to reward their friends and family with homes priced below market.”