Eight homeowners in Michigan filed a lawsuit in the U.S. Sixth Circuit Court of Appeals against Oakland County Treasurer Andrew Meisner.
The suit contends that the foreclosure process is unconstitutional, as the government has taken property for delinquent property taxes and other fees without providing fair equity to the owners.
The Pacific Legal Foundation (PLF), the group representing the plaintiffs, provided the example of Tawanda Hall, a nursing assistant in the state.
After falling behind on her payments, she and her husband developed a plan to pay back the money. However, Meisner intervened and took their home because of the $22,642 debt. The organization proceeded to sell the house.
“Instead of selling the house at public auction, paying off the debt, and returning the surplus (minus interest and penalties) to the homeowners, the county used the Halls’ money to enrich a private company, Southfield Neighborhood Revitalization Initiative, LLC, managed by City of Southfield officials. Through a series of legal transactions, the county took the Halls’ home (and the homes of seven other homeowners party to this case) and transferred it through the City of Southfield to the Revitalization Initiative, which sold it for more than $300,000. The Halls received none of the difference between the debt they owed and the sales price,” PLF explained.
According to the suit, the foreclosure process violates the Takings Clause of the Fifth Amendment of the U.S. Constitution.
“When the government takes private property, it must pay just compensation, no matter how it acquires the property,” Pacific Legal Foundation (PLF) senior attorney Christina Martin said in a statement. “The government has compensated homeowners with forgiveness of debts worth only a fraction of the homes that the government took. That is unconstitutional and unjust.”
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