Tax forfeitures: a sign of the tough financial times

By Charles Sercombe
Just how tough is it for Hamtramck homeowners?
Must be pretty horrible considering over 150 homeowners are going to lose their houses if they don’t square up their property taxes by March 31 of 2010. On Sunday, the Wayne County Treasurer’s Office released a massive listing in the Detroit Free Press of properties facing tax forfeiture.
Last year was almost as bad. City Assessor Tony Fuoco said it’s a “sign of the times” that this year’s listing is larger. Included in the list are houses and properties owned by former city officials, prominent property owners, local businesses and regular folks.
The taxes owed to the county are from 2007 and possibly earlier. Fuoco said what happens in some instances is that the property values have plummeted so deeply, the taxes owed are more than what the hose is worth.
“That’s when people just walk away,” Fuoco said.
Several weeks ago, Wayne County put up for sale 18 Hamtramck properties that fell into tax forfeiture the previous year. The current list of tax delinquencies are not for sale yet. If no one pays the taxes owed, the properties will be put up for auction by the county next September.
Housing values are expected to continue to drop in the coming years, economists say. Houses that once fetched $80,000 several years ago before the housing boom went bust are lucky to sell for $20,000.
According to housing experts, the average value of a house in Detroit is now $10,000.
The drop in housing values has a ripple effect for local and state governments that face a huge loss in tax revenue collection. That means cities – and school districts – will be forced to continue making cuts in their budget.
That, in turn, often results in employee layoffs, which in turn leads to more mortgage and tax defaults.
The Wayne County Treasurer’s Office is has a program for homeowners to avoid tax foreclosures. For more information, call (313) 224-6105.