Detroit introduces a plan to cut the number of home foreclosures

An Anmerican Home - Stock photo by Pexels

Wayne County Executive Warren C. Evans, Mayor Mike Duggan, and Wayne County Treasurer Eric Sabree called on the Michigan Legislature to implement a sweeping new approach to assist tens of thousands of Detroiters and Wayne County residents who owe back property taxes avoid foreclosure. The plan builds on steps the City and County have already taken to reduce occupied home foreclosures by 94% since 2015.

Michigan State Representative Wendall Byrd (D-3) has introduced legislation that will facilitate this proposal. They call this proposal to minimize foreclosures Pay As You Stay or PAYS. This proposal aims to reduce tax foreclosure for Detroit homeowners who live in poverty and who are struggling to make payments.

According to data from the City of Detroit, this plan would help approximately 31,000 homeowners stay in their homes by dramatically reducing the amount they owe on their back taxes and lowering their monthly payments.

This payment plan is available to all those eligible for the poverty tax and disabled veteran exemptions. It will remove interest, penalties, and fees so only back taxes or 10% of taxable value is owed whichever is less. This will include any past due balance on the City of Detroit’s solid waste fees.

Pay As You Stay is a simple, three-part plan:

1. Once you enroll, all interest, penalties and fees would be eliminated;
2. To reduce an undue burden on homeowners, the balance due would be limited to back taxes only or 10% of a home’s taxable value – whichever is less; and
3. The remaining balance would be paid back over three years at zero percent interest.

Homeowners who qualify for a full or partial Property Tax Exemption and enroll in future years would be eligible for the program. To be PTE-eligible, a household with 1 person could not make more than $19,303 per year; a household with 4 people could not make more than $28,671.

“Since 2015, we’ve been able to reduce the number of occupied foreclosures by 94%, but far too many Detroiters still are at risk of foreclosure,” said Mayor Mike Duggan. “Pay As You Stay would help more than 31,000 Detroit homeowners stay in their homes by eliminating interest, penalties and fees and making payment plans affordable for those who need them.”

Detroit City Council Member Janee Ayers added in a statement on Facebook, “Our city can only thrive if we work with our most vulnerable residents who have stayed here through the hardest times.”

More information about this Pay As You Stay proposal is available on the City of Detroit's website.

The Warrendale Detriot Blog will continue to follow this story as it develops and the PAYS legislation moves throught the Michigan Hosue of Representatives.