The Wayne County treasurer’s office holds two tax foreclosure auctions a year. The first, held in September, auctions off properties at a starting bid equal to the amount owed in taxes. The second, held in October, auctions off properties that didn’t sell in September, at a starting bid of $500.
The office began foreclosure proceedings on 42,000 properties this year. “We could have pursued twice as many but our office couldn’t handle the volume,” said Chief Deputy Treasurer David Szymanski, who believes that’s the highest number of any county in the country. “I’m sure we’re the worst off.”
Cuyahoga County, which encompasses Cleveland, probably runs a distant second, he said.
Cuyahoga County initiated foreclosure proceedings on 801 delinquent properties from January through end of July this year, according to the county prosecutor’s office, which handles these cases. The office expects the number to increase to about 2,600 by year’s end.
Cuyahoga County has a running total of about 48,000 delinquent properties built up from previous years as well as this year. Wayne County’s comparable figure is about 199,000.
Szymanski doesn’t expect Wayne County’s number to begin falling for another two years.
In 2011, the office offered 13,511 properties and sold 6,508, bringing in $28 million. Last year, it offered 21,350 properties and sold 12,333 for a total of $46 million. Szymanski expects the number of properties sold this year to be about the same as last year, as owners of about 20,000 of the properties on notice have taken steps to avoid foreclosure.
The money goes to all the taxing authorities involved, including the county but also local communities, school districts and the Detroit Zoo.
About 90 percent of the properties are in Detroit. Typical property tax debt at foreclosure time is $8,000 to $12,000, Szymanski said. The treasurer’s office wants people to know that occupants of tax-foreclosed properties — renters and tax-delinquent former owners alike — are allowed to participate in the auctions.
“We’ve got a situation that people in other parts of the state and country can’t understand,” Szymanski said. “I’ve got 42,000 properties. If I evict, someone is going to strip everything of value anyway.”
There are programs to help people stay in their homes, such as hardship exemptions for the current tax year and assessment appeals. Both begin with the city. Szymanski said many people don’t follow the assessment appeal through to the state level and that’s why they don’t get what they need.
This year a new option became available through Step Forward Michigan, a program funded by nearly $500 million in federal Troubled Asset Relief Program money and run by the Michigan State Housing Development Authority. The program gives a zero-percent loan of up to $30,000 to qualified owners that is forgiven as long as the homeowners maintain the property as their primary residence.