Banks walk away from homes, cost Washtenaw County $1.5M in chargebacks

Several counties across the state, including Washtenaw County, are dealing with a phenomenon of banks "walking away" from houses despite owing thousands in taxes, according to a Detroit Free Press report.

Seventy-six percent of the 274 properties in tax foreclosure this year in Washtenaw County are those that banks have some sort of financial interest in, according to the Free Press.

Tax foreclosures often lead to chargebacks, which is when the treasurer cannot collect the taxes owed from the bank or owner and the communities are then charged. Chargebacks cost Washtenaw County about $1.5 million.

As an example of ongoing issues with bank tax foreclosures, Ypsilanti Township has sued Germany's Deutsche Bank over property nuisance issues at Wiard Court, the Free Press reports.

AnnArbor.com reported in May that two homes in Wiard Court were uninhabitable, one of which had a yard where raw sewage leaked and kids were discovered to be playing in 2010.

The homes were immediately condemned and residents ordered to leave, but the properties at the time sat in decay. Issues at Wiard Court, an isolated residential pocket near the northwest corner of the Willow Run Airport property, date back to 2006. Other reported issues included a dog fighting operation being busted by LAWNET and 17 pit bulls being rescued from the house.

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