Foreclosure fight dodged by Supreme Court

The Supreme Court has declined to certify a petition for a writ of certiorari from a Florida resident that could have had implications for a landmark decision involving consumer rights in a Minnesota tax-debt foreclosure.

Robert Turner's petition asking for a review of an 11th Circuit Court decision in his case could have had implications for interpretations of the earlier Minnesota lawsuit, Tyler v. Hennepin County, according to Bloomberg Law, which was the first to report on the development.

Geraldine Tyler had successfully argued Minnesota violated the U.S. Constitution by engaging in "home equity theft" and not returning surplus funds when the state foreclosed on her property. Turner's petition asked the court to review what he alleged was the "impermissibly low" sale of his homestead property on constitutional grounds, according to court documents on Justia.

Why tax foreclosure procedures are an issue to watch

While the Supreme Court rarely responds to requests for review, if it had done so the move could have had implications for how mortgage servicers and states respond to tax foreclosures at a time when the average homeowner's assessment is rising. 

States have had varying rules when it comes to what happens to surplus funds in property tax foreclosures, and some have engaged in legislative adjustments in response to Tyler v. Hennepin County. 

While Turner's petition for a writ of certiorari was denied, there still is potential for the Supreme Court to review its Tyler v. Hennepin County decision in other contexts, said John Rao, senior attorney at the National Consumer Law Center.

"There are some state tax foreclosure procedures that raise constitutional concerns even if they appear to comply with Tyler by allowing for the recovery of surplus proceeds," Rao said in an email. 

A case to watch in that context is Beeman v. Muskegon County, according to Rao.

"The Beeman case challenges Michigan's incredibly burdensome process for claiming surplus proceeds that was enacted after Tyler," he said. "The Court asked the county to respond to the petition for cert, which suggests there might be some interest in the case at least for some of the justices."

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