Victory! Sixth Circuit Saves Widow’s $277,000 from Michigan’s Home Equity Theft

October 18, 2022 | By BRITTANY HUNTER
Tawanda Hall

Michigan nursing assistant Tawanda Hall has cause to celebrate after the U.S. Court of Appeals for the Sixth Circuit ruled last week that Michigan violated the Constitution when it took her home to satisfy an unpaid property tax debt. 

After experiencing financial hardships, Tawanda fell behind on her property taxes. When she went to set up a payment plan, she was shocked to learn that the government had begun the process of seizing her home to satisfy the debt, using a practice called home equity theft. 

Combined with interest and fees, Tawanda owed a total of $22,262, which the government had a right to collect. But the value of her home was around $300,000, which far exceeded the amount due. Yet, Tawanda never saw a single cent of that money.  

Represented by Pacific Legal Foundation, Tawanda sued Oakland County on the grounds that they violated the Takings Clause of the Fifth Amendment, which guarantees just compensation if the government takes an individual’s property.  

Thankfully, Judge Raymond Michael Kethledge agreed.  

In his decision, Judge Kethledge wrote: 

 … the Michigan statute is not only self dealing: it is also an aberration from some 300 years of decisions by English and American courts, which barred precisely the action that Oakland County took here. 

… The government may not decline to recognize long-established interests in property as a device to take them. 

He concluded: “We therefore reverse the district court’s dismissal of their claim against the County under the Takings Clause of the U.S. Constitution.” 

While the victory is surely a relief for Tawanda and her family, she has been through hell and back since this nightmare began years ago. Under the weight of the burden the county’s use of home equity theft caused her family, her husband’s health deteriorated. He was found unconscious at work and eventually died in hospice care. Without her husband, and robbed of about $277,000 in home equity, Tawanda was left devastated. More hardships would soon follow as she suffered yet another loss, the death of her brother.  

Tawanda’s story is just one of many.  

In Massachusetts, PLF client Deborah Foss was forced to spend a winter living in her car after she fell prey to home equity theft.  

Deborah’s story had a happy ending, although it was not a conventional win like Tawanda’s. Deborah was offered a settlement that compensated her for her losses. But the abhorrent practice of home equity theft remains legal in Massachusetts. as well as in other states.  

At least 12 states still practice home equity theft. PLF is fighting, not only to ensure our clients get the compensation they deserve, but also to end this predatory practice altogether so that no other individual must suffer like Deborah and Tawanda.  

PLF senior attorney Christina Martin, who argued Tawanda’s case, called the Sixth Circuit victory “an important step toward Pacific Legal Foundation’s goal of ending government-sponsored home equity theft in the United States.” 

“But our fight isn’t over yet,” she continued. “We will continue to advocate for people like Tawanda until home equity theft is rejected across this country.”