Tax foreclosures for unpaid property taxes set a Washtenaw County record this year, with officials assuming ownership of 639 parcels following the March 31 deadline.

The number tops the 391 properties that went to tax foreclosure auction in 2010 — and also exceeds the combined 539 properties that were lost to back taxes in Washtenaw County since 1997.

The dollar value of the unpaid taxes for all of the properties is about $5 million, said Treasurer Catherine McClary.

And the situation reaches across jurisdictions: “Virtually everyone was affected,” she said.

Notable exceptions were Saline, Chelsea and Pittsfield Township, which was host to the largest commercial tax foreclosure auction in the county in 2010 when undeveloped lots in Wellesley Gardens were auctioned.

McClary is compiling information on the properties and visiting each, in preparation for releasing a list detailing the type of property and how much is owed on it.

That should be done by June, she said, in anticipation of the online auctions — with starting bids at the amount owed for back taxes — starting in July.

So far, the types of properties include numerous undeveloped subdivision lots, which McClary describes as “the vast majority.”

Also emerging as a trend is the willingness of lenders to forgo paying the back property taxes to hold onto equity in the property. Falling values — particularly for development property — is prompting banks to “cut their losses” and sever the connections to a property by not paying the back taxes after a mortgage foreclosure.

“I have not yet visited a property that wasn’t a bank walkaway,” McClary said.

The sheer volume of properties heading to county auction this year is forcing McClary and other officials across the county to consider how to maximize sales totals for the properties, with the goal of covering all of the outstanding tax debt.

Two properties are former gas stations, so McClary is working with the Brownfield Commission to do a Phase 1 environmental assessment report, which would outline the condition of the property for a buyer and potentially remove liability for future cleanup.

Packaging the subdivision properties to make them attractive to smaller builders who might be more likely to buy less than an entire subdivision could be a strategy this year, too, McClary said.

And at least one of those properties — near Textile and Tuttle Hill in Ypsilanti Township — could be eligible for purchase by the county’s Natural Areas Preservation Program, funded by a countywide millage.

About 25 properties headed for tax foreclosure auction are in the city of Ypsilanti, a number close to the 2010 total, said Teresa Gillotti, city planning director.

“All of them are either houses, houses that should be demolished, or vacant (residential) land,” McClary said.

This year, the city and the county will collaborate on marketing those properties in a separate auction, scheduling open house tours and making the properties available for inspections — something normally not done in the “as-is” foreclosure auction.

“Some are in great condition,” Gillotti said, “some less so.”

The effort, she said, could result in fewer national speculators attracted to the auction, instead possibly encouraging more local ownership.

“We’re trying to be a little strategic,” Gillotti said.

With the online auction, “it seems like a lot of people are looking for good bargains, good deals,” she said.

By opening up the process so that zoning, condition and other concerns can be answered ahead of a bid, “we’re hoping to encourage buyers to think it’s less risky,” she said.

Meanwhile, many high-profile properties that were on the tax foreclosure list in early March came off it when the owners paid at least the 2008 taxes by the March 31 deadline, McClary said.

Among them: Several Ann Arbor commercial buildings and residential rentals, including the former Fifth Quarter, McClary said.

A total of 168 properties with 2008 taxes past due were redeemed in the last month before the March 31 deadline, McClary said. And earlier this year, she reported that the county is still owed about $30 million on unpaid 2010 taxes.

Paula Gardner is News Director at AnnArbor.com. Reach her at paulagardner@annarbor.com or 734-623-2586.