Michigan Tax Surplus Funds Kept by Counties - OVERTURNED

Michigan Tax Surplus Funds Kept by Counties - OVERTURNED

Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

Had a member of my facebook group (Cody Cox) and an attorney from Wood and Lamping send me this. For those that did not know, in Michigan if there was a tax sale the surplus was kept by the County. So for example, if $5,000 was owed on taxes, you had first lien with a balance of $50k, and the property sold at tax sale for $30,000 - in most other states you would get the $25k (assuming no other superior liens) on your first position note. In Michigan, this was not the case, as the county would keep all that $. 

Well the state got sued and finally lost. This is critical for note investors as there are occasions where you are better off letting a property go to tax sale and collect the overage. Well now thankfully in Michigan you can.

https://www.freep.com/story/news/local/michigan/2020/07/17/michigan-supreme-court-tax-foreclosures-profit/5459650002/?fbclid=IwAR3znlEhdlpn6Wd2a0twISdfNBZN9VNvbdgzbJ3hnJbUxX86s1gWi6fXID0

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  • Note Investor · Wilsonville, OR · Member since 2010 · 149 posts · 113 votes
    6y

    Very good news. let's hope there is some litigation to pave the way for the other folks that lost $$ to Michigan tax sales.

  • Ned CareyPro Member
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    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    6y

    @Chris Seveney thanks for the link @Chris Seveney. It is hard to believe the county actually thinks they are justified in this. i forwarded this to my attorney.

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