Twenty-eight Michigan counties have agreed in a federal class action to pay former owners 125 percent of the surplus money from tax-foreclosure sales, minus attorneys’ fees and costs. The surplus is what a county collected at auction above the unpaid taxes, fees and costs. Owners and heirs have to file a claim to be paid, and the court has not yet given final approval.
How the 125 percent rule works
The settlement administrator’s Surplus Proceeds Settlement site says class members can generally recover 125 percent of their property’s surplus proceeds, minus attorneys’ fees and costs, and adds that the amount is subject to certain potential adjustments.
A hypothetical shows the arithmetic. If a county sold a foreclosed house for $20,000 more than the owner owed in taxes, fees and costs, 125 percent of that surplus is $25,000 before fees and costs come off. The site does not publish the fee amount, so the take-home figure is not yet known.
Bloomberg Tax reported in August 2025 that the counties pay the administrative costs of enforcing the settlement, and that those costs do not come out of the settlement fund. Plaintiffs told the court they chose a negotiated deal over “protracted and uncertain litigation.”
Twenty-eight counties and a 2013 to 2020 window
The case is Fox v. Saginaw County, No. 1:19-cv-11887, in the U.S. District Court for the Eastern District of Michigan. Plaintiffs allege the counties violated owners’ rights by keeping the surplus when they sold foreclosed property at auction.
The class covers owners of property foreclosed by a listed county from 2013 through 2020 where the sale brought in more than was owed. The counties are Alcona, Alpena, Arenac, Bay, Clare, Cheboygan, Crawford, Genesee, Gladwin, Gratiot, Huron, Isabella, Jackson, Lapeer, Lenawee, Macomb, Midland, Monroe, Montmorency, Ogemaw, Oscoda, Otsego, Presque Isle, Roscommon, Saginaw, Sanilac, St. Clair and Tuscola.
Wayne, Oakland and Kent counties are not on the list, so a former owner there is not covered by this deal. Class members are persons or entities that had an ownership interest in the property, Bay County’s treasurer says.
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What a former owner or heir has to do
County treasurers in Bay, Crawford, Otsego and Saginaw have posted pages describing the settlement for properties sold for more than the taxes and expenses owed between 2013 and 2020. Otsego’s page says a timely claim is required to take part.
Payment is not automatic. Class members should have received a mailed notice with a unique ID, and anyone who believes they qualify but got no notice can contact RG/2 Claims Administration at 866-742-4955 or SurplusProceedsSettlement@rg2claims.com.
Claims can be filed online at claimsettlementportal.com/miforeclosure, or by printing the claim form from the settlement site and mailing it. Heirs of a class member must also file a claim, according to the administrator’s January 27 announcement.
Bay County’s treasurer gives the claims deadline as November 23, 2026. The January announcement carried July 16, which has since passed, so the later date is the one to work from, and the administrator’s phone line can confirm it. The settlement site does not list which documents a claim needs.
Anyone who excluded themselves by the April 30 deadline gets no payment but keeps the right to sue separately. Objecting to the deal does not prevent a claim, the administrator says, and doing nothing means no payment and no separate lawsuit.
The fairness hearing and the fee request still to come
The settlement site lists a fairness hearing on January 22, 2027 in Bay City. The judge will weigh whether the deal is fair and rule on lead counsel’s request for attorneys’ fees and reimbursement of costs. Attending is optional, and class members who did not exclude themselves may ask to speak, the administrator’s announcement says. Full settlement terms are on the site’s case documents page.
The deal resolves claims from sales before 2021. It does not decide how a county handles surplus money from sales after 2020, and the notices describe no relief for sales outside the 2013 to 2020 window.
The exclusion and objection deadline was April 30, 2026, with a possible extension described in the class notice. That window has closed for most people, which leaves a claim as the only step still open to a former owner who wants to be paid.
That hearing is why the 125 percent is a rate, not a payout. Until the judge rules on fees and the total number of valid claims is known, no former owner can say what the check will be. The administrator has not announced a payment date.
The extra 25 percent is the settlement’s premium over what the county kept. On the hypothetical $20,000 surplus, it is $5,000 on top of the surplus itself, and fees and costs are taken out of the whole.
The practical question for a former owner is short: did one of the 28 counties sell the property for more than the tax bill, and who in the family can file for it?
Did a Michigan county keep the profit on a foreclosed house?
A surplus claim turns on dates and paperwork: the year of the sale, the county, the notice sent to an old address, and heirs who need to file for someone who has died. Missing the November 23 date listed by Bay County, or filing without the right ID, can end a claim that was worth more than the original surplus.
The Settlement & Refund Recovery System covers the four-date rule for reading a settlement notice and a step-by-step filing walkthrough, plus a claim log and payment tracker for keeping the county, sale year and filing date together. Part 5, Proof: Claiming When the Receipts Are Gone, helps when the foreclosure papers are years old.
Get the surplus-claim tracker and filing walkthrough for a county tax foreclosure →
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
