Property Ownership

In Michigan, a property tax foreclosure for unpaid taxes differs from a mortgage foreclosure because:

AProperty tax foreclosures require court approval; mortgage foreclosures do not
BTax foreclosures eliminate virtually all other liens including mortgages; mortgage foreclosures do not eliminate senior tax liens✓ Correct
CProperty tax foreclosures have no redemption period
DOnly commercial properties can be tax foreclosed

Explanation

Michigan property tax foreclosures (under PA 123 of 1999 after 3 years of delinquency) result in forfeiture to the county land bank, effectively wiping out nearly all liens including mortgages. This is a major risk for lenders on tax-delinquent properties.

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