DETROIT – Lawmakers today announced a plan that will help keep residents in their homes and add new protections against foreclosure amid one of the worst recessions in memory. The Homeowner Protection Plan creates new tools to protect homeowners from property tax foreclosure, especially seniors and working families that are hurting in this economic downturn.
"So many people have worked hard and played by the rules, yet have fallen victim to these devastating economic times through no fault of their own," said State Representative Gabe Leland (D-Detroit), a sponsor of the plan. "This plan is about helping people who are hurting in this tough economy hold on to their piece of the American Dream and protecting our neighborhoods by helping responsible residents stay in their homes."
The plan builds on House Democrats' mortgage foreclosure legislation that took effect in July. That law grants a 90-day lifeline to homeowners facing foreclosure who commit to working with their lender and a housing counselor to reach a solution. The new Homeowner Protection Plan aims to help people who have lost their jobs or face other hardships in this economic downturn and are unable to keep up with their property taxes. The plan specifically targets struggling homeowners whose income has fallen to 200 percent of the poverty line or below. The new plan protects struggling homeowners from property tax foreclosure by:
- Creating hardship extensions on property tax payments for households with an income that is equal to 200 percent or less than the federal poverty guidelines.
- Making homeowners eligible for an exemption from property taxes if their income is at or below the poverty level and they are unable to pay.
- Strengthening notification requirements to ensure that homeowners facing property tax foreclosure have time to work with local governments to save their homes.
- Strengthening protections against foreclosure as a result of unpaid water and municipal utility bills.
"No one benefits when a home goes into foreclosure – it hurts homeowners, local governments and our communities," said State Representative Rashida Tlaib (D-Detroit). "When a home goes into foreclosure, property values of surrounding homes fall, and vacant and blighted homes become dangerous eyesores that drive away businesses and threaten the safety of our communities. This plan will not only give families who have fallen on tough times the chance to get back on their feet, but it also will protect our neighborhoods and boost our economy."
The plan helps more homeowners avoid foreclosure by allowing local governments to grant hardship extensions to people whose income is double the federal poverty level or lower and by making property owners whose income is at or below the federal poverty level eligible for property tax exemptions. Under current law, local governments can use their own guidelines to decide whether a person at the poverty level is "poor enough" to be unable to pay.
"Too many Detroiters are losing their homes to foreclosure – decimating our families, neighborhoods and communities," said State Representative Fred Durhal, Jr. (D-Detroit). "Especially in these tough economic times, we need to support and defend our homeowners and give them the opportunity to avoid foreclosure. Helping more residents keep their homes is in everyone's best interest and will ensure that our community is a place where both residents and businesses can thrive."
The legislation also maximizes the time that local governments and property owners have to work out a plan to avoid property tax foreclosure by requiring notices to specifically identify the time and date by which property owners must pay their taxes in order to avoid foreclosure.
"As this economic downturn continues, more and more of our hard-working families in Detroit are losing what they have worked so hard for," said State Representative David Nathan (D-Detroit). "When a home goes into foreclosure, our homeowners, communities and economy all suffer. This plan will protect our struggling homeowners by providing a much-needed lifeline to keep their homes."
Property tax foreclosure affects thousands of people in Michigan every year, forcing many seniors and other low-income or fixed-income residents from their homes.
"Hard-working Detroiters deserve every opportunity to save their homes," said State Representative Bettie C. Scott (D-Detroit), a sponsor of the plan. "People who have paid their bills for years are running into problems they never thought they'd face. This plan will give our most vulnerable residents the help they need to remain in their homes in these tough economic times."
State Representative Douglas Geiss (D-Taylor) said: "In these tough economic times, too many of our hard-working families in Wayne County are being forced to surrender their homes simply because the resources they need are not available. This plan will give our homeowners a helping hand that will allow them to avoid foreclosure and help them get back on their feet."