- Associated Press - Wednesday, July 13, 2016

DETROIT (AP) - A class-action lawsuit has been filed to prevent the auctioning off of tax-foreclosed homes in Wayne County and the city of Detroit.

The American Civil Liberties Union of Michigan and National Association for the Advancement of Colored People filed the suit Wednesday on behalf of seven homeowners and a coalition of neighborhood groups. It names the county, its treasurer and the city of Detroit.

About 90 percent of the 15,170 properties in foreclosure from the 2013 tax year are in Detroit, and many of them are vacant parcels of land or empty houses.

Properties were overassessed by the city, and the process for homeowners to apply for a poverty exemption was “in some cases, impossible,” according to the ACLU. Assessment values help determine tax rates.

In Wayne County, about 28,000 homes were foreclosed on last year. The county is bound by state law to auction foreclosed properties, Treasurer Eric Sabree said.

“It doesn’t specify whether a person is overtaxed. It forecloses everything,” Sabree said. “We’ve taken as many people out of foreclosure as we can.”

ACLU of Michigan Legal Director Michael Steinberg said the county and the city “are creating a human catastrophe by tossing thousands of homeowners into the streets for inability to pay unlawfully assessed taxes.”

“This short-sighted practice not only violates federal law, it destabilizes families, destroys neighborhoods and undermines the economic recovery of the region,” Steinberg said.

City and county officials pressed the state Legislature in recent years to pass a new law allowing the Wayne County treasurer’s office to offer payment plans to homeowners in foreclosure.

“The result being that 27,539 Detroiters who were in foreclosure a year ago were able to stay in their homes,” city Corporation Counsel Melvin Hollowell said.

The 4- to 5-year plans come with a 6 percent interest rate. Prior to the new law, repayment came with an 18 percent interest rate.

Sabree said 8,000 homes were visited this year and more than 3,000 people facing foreclosure were contacted as part of an outreach effort to reduce foreclosures.

“This complaint filed by the ACLU has nothing to do with the Wayne County Treasurer’s office,” he said “It is an attempt to ignore state law and prevent the property tax foreclosure auction from taking place.”

Earlier this year, Detroit Mayor Mike Duggan announced a drop in residential property assessments for about 95 percent of residents after years of complaints from angry homeowners.

He said assessment values were to fall from 5 to 15 percent for most of Detroit’s 220,000 residential properties for this year, though 5 percent would face a 5- to 15-percent increase.

The city said Wednesday that residential property tax assessments have been cut each year since 2008.

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