Wayne County failed to tell foreclosed homeowners about federal lawsuit, judge rules

A federal judge has ruled that Wayne County failed to notify tens of thousands of homeowners about a pending federal class action lawsuit. The lawsuit, filed in October 2020 in the U.S. District Court for the Eastern District of Michigan, alleges "gross governmental abuse" in the county's foreclosure process. Specifically, the suit claims the county illegally seized surplus proceeds from foreclosure sales that should have legally belonged to the homeowners.

Judge Linda V. Parker found that the county's failure to disclose the litigation, combined with the practice of requiring claimants to sign waivers denying their rights to surplus funds, constituted a "material omission." This omission prevented homeowners from knowing they might be eligible to join the class action lawsuit.

As a result of the injunction, Wayne County is now required to contact all past homeowners who signed waivers to notify them of the pending litigation. Additionally, the county must notify any future homeowners entering foreclosure agreements about the case to ensure they can make informed decisions regarding settlements or joining the class action.

(Source：WDIV ClickOnDetroit)