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MLive News: 43 Michigan Counties Agree to Pay Millions to Former Owners of Foreclosed Properties…

Excerpts from the article

Forty-three Michigan counties have agreed to return what will likely be tens of millions of dollars from the sale of foreclosed properties to those properties’ former owners, settling a class-action lawsuit filed in 2014.

The issue in the case was the fact that foreclosed properties frequently sell at auction for more than what is owed in unpaid taxes and fees, and, for years, Michigan counties habitually kept the surplus.

The plaintiffs argued that keeping that money violates the U.S. Constitution’s takings clause, which says private property shall not “be taken for public use without just compensation.”

Wayside Church

The case began with a church camp about 13 miles north of Dowagiac.

James Shek, an Allegan attorney, was at a foreclosed property auction in Van Buren County in the summer of 2014, hoping to bid on a piece of property.

What he saw, according to Ryan and Owen Ramey, another Lewis Reed & Allen attorney, was the camp owned by Wayside Church, a small congregation on Chicago’s south side, being sold for more than $200,000 to pay of a debt of less than $17,000.

It seemed like a clear-cut case under the takings clause. He reached out to the church….

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