It’s not ‘just’ to erase someone’s home equity

In 2019, Isabella County, Mich., seized Timothy Pung’s family home over a disputed tax debt of roughly $2,000. The county sold the house — worth nearly $200,000 — for just $76,000. Months later, the buyer resold it for $195,000. The result was that the Pung family walked away with less than half the market value of their home, due to a small tax debt they contended they never owed.

Last month, the U.S. Supreme Court decided that property owners aren’t entitled to fair market value when the government seizes and sells their home to satisfy a debt — but that the process at least has to be fair. The court sent the Pungs’ case back to a lower court to decide whether the auction of their home satisfied that standard. As Justice Clarence Thomas wrote in his concurrence, “What Isabella County did to the Pungs was wrong, and, on my initial view, likely unconstitutional.”

Most people would find wiping out someone’s home equity — which people build up for years and rely on for retirement or a child’s college fund — deeply troubling. At the Supreme Court, the Pungs had argued that the Fifth Amendment requires governments to make them whole for that equity, and they were therefore entitled to fair market value. But at oral argument, it became clear that some of the justices had reservations about requiring the government to give them fair market value in every case. The fact is, forced sales almost always produce depressed........

© The Hill