State Rep. David Rutledge, D-Superior Township, announced today a proposal aimed at helping struggling homeowners avoid property tax foreclosure.

The Homeowner Protection Plan would create new tools to help local governments protect homeowners, especially seniors and working families, Rutledge said in a statement.

"Foreclosure can be devastating for an individual homeowner and his or her family, and inevitably affects the community surrounding the property," he said. "This plan is about empowering communities to have the necessary information to assist homeowners, and providing additional resources to avoid foreclosure."

David Rutledge

The legislation is part of a package to be introduced by House Democrats this week. It aims to simplify the process for dealing with delinquent taxes and gives local governments and struggling homeowners more time to work out a plan to avoid foreclosure.

According to a summary provided by Rutledge's office, the plan would:

• Create hardship extensions on property tax payments for households with an income that is equal to 200 percent or less than the federal poverty guidelines.
• Establish a uniform process under which homeowners can apply for an exemption from property taxes if their income is at or below the poverty level and they are unable to pay.
• Strengthen notification requirements to ensure that homeowners facing property tax foreclosure have time to work with local governments to save their homes.
• Require lenders to notify local governments at least 30 days before a property is foreclosed on.
• Strengthen protections against tax foreclosure as a result of unpaid water and municipal utility bills.

Last year’s tax foreclosures in Washtenaw County included 515 properties — or 55 percent of all the properties facing tax foreclosure since 1997. This year, the tax foreclosure season started with 807 properties on the list, 550 of which were undeveloped subdivision sites.

Rutledge said he has spoken with community leaders in Washtenaw County about the need for earlier information about properties in danger of foreclosure. He said the legislation would help local governments communicate with residents and connect them to resources that can help them avoid foreclosure.

"Washtenaw County residents are fortunate to have a number of quality programs designed to help homeowners stay in their homes," Rutledge said. "But many homeowners simply do not know what is available to them."

Under current law, local governments use their own guidelines to determine whether a person at the poverty level is poor enough to be unable to pay. Rutledge's plan would establish specific criteria for local governments to follow to determine whether property owners whose income is at or below the federal poverty level are eligible for full or partial exemptions.

It also would maximize the time that property owners and local governments have to work together to avoid property tax foreclosure by requiring notices to specifically identify the time and date by which property owners must pay their taxes to avoid foreclosure.

Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.