Pung v. Isabella County · ¶31

Tax sales constitute such a situation. If a property owner receives proper notice that his or her property may be sold to recover unpaid taxes and if the owner believes that the fair market value of the property exceeds the taxes that are due, the owner may be able to avoid foreclosure by refinancing the property or using the property as collateral for a new loan to pay off the taxes. Or the owner may be able to sell the property (or other property) himself before foreclosure, pay off the tax debt, and keep what is left to buy or rent a new home. See, e.g., 26 U. S. C. §6325(b)(3) (permitting discharge of federal tax liens for properties to be sold). Here, the Pungs had years to take these steps and avoid foreclosure. See Mich. Comp. Laws §211.78g(3); §§211.78k(5)–(6). They failed to do so. In such a situation, the traditional rule, under which the taxpayer receives only the difference…

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