Loophole Allowing Detroit-Area Property Owners To Stiff County On R/E Taxes, Water Bills To Continue As Befuddled Officials Refuse To Ban Racket

In Detroit, Michigan, The Detroit News reports:

• State officials and area county treasurers say Wayne County already has the authority to stop a growing number of property owners from ditching tax debt by buying their land back for pennies on the dollar at the annual foreclosure auction.



• But Wayne County officials said they don't want to ban the practice, arguing it would be too hard to enforce and could hurt poor homeowners. "We have no plan to do that at this point," said Wayne County Chief Deputy Treasurer David Szymanski. "The enforcement mechanism for not allowing people to buy back is a nightmare." "We are trying the do the best we can in trying economic times."



• The Detroit News reported last week that Detroit property owners are using the little-known loophole to erase tax debt, interest, fees and unpaid water bills by letting properties go into foreclosure and then buying them back at the Wayne County treasurer's auction, sometimes for as low as $500.



• The News identified about 200 of nearly 3,700 Detroit properties sold at auction last year that appeared to be bought back by owners, wiping away about $1.8 million in tax debt. That included one Detroit landlord who lost seven rentals after he didn't pay $131,800. He bought them back a month later for $4,051.

For more, see Counties can ban owners from foreclosure resales (But Wayne officials say they don't want to prohibit practice).