Michigan Attempts to Quell Real Estate Scavengers

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Michigan Attempts to Quell Real Estate Scavengers

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Michigan has a great many problems these days. Real estate prices have continued to drop like a rock, unemployment is currently a "reported" 10.9 percent and the automobile business, even with a massive influx of federal money, is staggering. To add to the misery index, Detroit was ranked the least educated city in the United States. Times are not getting any better.

The state is, however, attempting to make changes in hopes of preventing further urban blight. For years, many tax foreclosed homes have been sold at auctions, sometimes for as low as $100. In some circles, people purchasing these foreclosed properties are referred to as real estate speculators. A more apt name for them is real estate scavengers.

The problem with these scavengers is they buy property for pennies on the dollar and then let them go into total decline. Nothing is done to rehabilitate the property, it may sit vacant for years and the entire neighborhood becomes abandoned and dangerous for the few remaining residents.

In Flint, for example, 58 houses were recently listed for sale on eBay by an out-of-state company. They purchased the properties for less than one third of their current asking price. The houses were marketed on the website as suited for rental properties.

Genesee County, however, is taking steps to prevent speculating and real estate scavengers from this type of activity. Officials want to change state law to allow county treasurers more discretion on how and when to auction foreclosed property.

Sate Representative Jim Ananich has introduced a bill that will give more local control to counties and municipalities. Currently, state law requires the county to hold a second auction before houses revert to local government ownership and control. His bill will eliminate the second auction phase where foreclosed properties are then sold with no minimum bid.

Ananich's bill was introduced in June and is pending in the state's House Committee on Local, Intergovernmental and Regional Affairs. Passing it will be a step forward for Michigan.

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Tags: • ownership • auction • speculating • auctions • detroit • unemployment • michigan • rental properties • buy property • foreclosed properties • foreclosed homes •

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