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Changes to Michigan's tax foreclosure system after court ruling

Courtesy Michigan Supreme Court

The Michigan Supreme Court has dealt a blow to county treasurers with a new ruling.

It says counties can’t keep any profits they get from selling tax-foreclosed homes at auction.

The ruling stems from a lawsuit that challenged one part of Michigan’s tax foreclosure law.

The court says counties that profit off any foreclosure auction sales can’t keep that money. They must return it to the former homeowner.

Eric Lupher is with the Citizens Research Council of Michigan.

He says that’s effectively a death blow to the state’s tax foreclosure system--and the state legislature will need to fix it.

“Blow up the system and start over to live within the court decision,” said Lupher.

Lupher says it’s also a potential financial disaster for counties.

Some foreclosed former homeowners could now come looking for the county to refund those profits.