How Townships Can Assist Homeowners Facing Foreclosure

Real estate foreclosures have been in the news lately as Michigan homeowners have experienced high foreclosure rates. Mortgage foreclosures occur when the homeowner defaults on the mortgage; tax foreclosures occur when the property taxes are not paid. (See the May 2008 Financial Forum column for a discussion of foreclosures and how township revenues may be financially affected by foreclosures over time.)

Townships do not have the same authority to assist homeowners as federal or state government entities--or private organizations--but there are things township officials can do. 

As the government most accessible to residents, townships can provide the extra bit of customer service to make information available to homeowners regarding available deferments, exemptions, tax credits and human services resources to help prevent mortgage or tax foreclosures.

The township can direct homeowners facing tax foreclosure to the county treasurer, who can often assist delinquent taxpayers with payment plans.

If properties are foreclosed, a township can participate in several programs to prevent blight and put tax-reverted properties back in use and on the tax roll:

Avoiding Mortgage Foreclosure

• Avoiding Foreclosure (.pdf) (Michigan Attorney General brochure)
• Michigan Attorney General's Office Home Lending and Foreclosure Rescue Scams Web page
• Michigan State Foreclosure Task Force Web site (Community Economic Development Association of Michigan Web page)
• The U.S. Department of Housing and Urban Development (HUD) This federal agency site offers links to housing news, information about home owning and financing, and tips for avoiding foreclosure.
• SEMCOG Foreclosure Resources Web page
• Washtenaw County Treasurer's Office Mortgage Foreclosure Prevention Web page  
• Federal Trade Commission Mortgages and Real Estate Consumer Information Web page

The Real Property Tax Foreclosure Process

• Michigan Department of Treasury Tax Reversion General Information
• Washtenaw County Treasurer's Office Tax Foreclosure Prevention Web page

Tax Deferments, Exemptions and Credits

• 2008 Michigan Taxpayers Guide (.pdf) 
• Michigan Department of Treasury Property Tax Web portal
• Michigan Department of Treasury Tax Information for Senior Citizens and Retirees
• Michigan Department of Treasury Homestead Property Tax Credit Web page (Michigan income tax credit)
• Michigan Homestead Property Tax Credit for Veterans and Blind People (.pdf)
• Michigan Department of Treasury Principal Residence Exemption Web page (Property tax exemption)
• Applications to Defer Summer Taxes 
• Property Tax Relief During Active Military Service (.pdf) 
• MTA Poverty Exemptions Web page

Homeowner Resources

• HUD Michigan Resources This Michigan-specific HUD site links to resources and agencies around the state to help homeowners in financial crisis.
• Michigan State Housing Urban Authority (MSHDA) Homeownership Web page The MSHDA provides information about foreclosures and the foreclosure process, information on where to turn for help, and offers a referral service for homeownership counseling. 
• MSHDA “Save the Dream” Program Web site Homeowners can also call (866) 946-7432, a hotline that directs homeowners to a housing counselor in their county or to technical experts in MSHDA’s Homeownership Division.    

Neighborhood Revitalization/Blight Elimination

• HUD Dollar Homes Initiative HUD’s Dollar Homes initiative helps local governments foster housing opportunities for low- to moderate-income families and address specific community needs by offering them the opportunity to purchase qualified HUD-owned homes for $1 each. Communities can fix up the homes and put them to good use at a considerable savings. The newly occupied homes can act as catalysts for neighborhood revitalization, attracting new residents and businesses to an area.  
• MTA Economic Development Web page
• MTA Blight Elimination Web page
• Michigan Department of Treasury Tax Collection and Tax Reversion Web portal (Information on state and county property tax reversion procedures)
• State Foreclosed Real Property Information and Listing