DETROIT – A plan introduced by State Representative Bettie C. Scott (D-Detroit) that will strengthen protections for residents facing foreclosure as a result of unpaid water and municipal utility bills is on its way to the House floor for a vote. The lawmaker's plan will help keep more residents in their homes and add new protections against foreclosure amid one of the worst recessions in memory.
"None of us benefit when homes are foreclosed on – it hurts homeowners, local government and our neighborhoods," Scott said. "As elected officials of the State of Michigan, my colleagues and I have a duty and obligation to protect our residents and homeownership. Detroit especially has been hit hard with foreclosures so we need to do all we can to help our residents in these tough times and make sure that homeowners are not forced out of their homes simply because of past due bills."
While delinquent property taxes often are a cause of foreclosure, many Michigan residents also face the possibility of foreclosure due to unpaid utility bills. This is because utility bills are often defined as taxes by many municipalities and counties.
Under Scott's plan, delinquent water bills or any other utility bills will no longer be able to be defined as taxes and therefore a cause for foreclosure. However, municipalities and counties will still be able to collect these unpaid utilities during a tax foreclosure.
Scott's plan is part of the Homeowner Protection Plan, bipartisan legislation that aims to help more homeowners avoid foreclosure by allowing local governments to grant hardship extensions or property tax exemptions to low-income residents. The Homeowner Protection Plan also maximizes the time that local governments and property owners have to work out a plan to avoid property tax foreclosure by requiring notices to specifically identify the time and date by which property owners must pay their taxes in order to avoid foreclosure.
"Property tax foreclosures affect thousands of low-income or fixed-income residents every year," Scott said. "Past-due utility bills shouldn't be a driving factor in forcing these families and seniors out of their homes and onto the streets. These are people who have fallen on hard times and deserve a chance to get back on their feet. My plan will help do that."