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United States News Title: Foreclosures to be sold back to owners in ACLU, city settlement Under the plan, a group of homes headed to this year's fall tax auction will instead be bought by the city and sold to owner-occupants who prove they qualified for the city's poverty tax exemption, which lower or eliminate tax bills. The ACLU sued the city in Wayne County Circuit Court two years ago over how it administered the state-mandated property tax break for the poor, arguing it was inaccessible to the vast majority of homeowners who were needlessly losing their homes to foreclosure. It's not clear how many homes would be sold back to owners this fall but it could be in the hundreds, officials said. The Detroit City Council must approve the settlement. “We’re thrilled that this settlement will help thousands of Detroiters who were going to lose their homes for inability to pay taxes they never should have had to pay," said Michael Steinberg, legal director of the ACLU of Michigan. "It's a start to putting the worst tax foreclosure crisis since the Great Depression behind us." Funding to buy the homes will come from a $1 million donation from Quicken Loans and $275,000 contributed by city as a part of the lawsuit settlement agreement, Steinberg said. He said more funding from area foundations is expected for the program, which will be run by the United Community Housing Coalition, a city housing nonprofit. The foreclosure crisis has had a deep effect on Detroit, which remains the nation's poorest big city and recently flipped from majority homeowner to 54 percent renter. The county seized about 100,000 Detroit properties for unpaid property taxes from 2011 through 2015, about a quarter of all parcels, researchers have found. About 4,800 Detroit properties are headed to foreclosure this year as of mid-June, according to data from the treasurer's office. Of those, about 2,000 are believed to be occupied by homeowners or renters. The United Community Housing Coalition, which helps residents avoid foreclosure, said it has about 100 clients so far it believes will qualify. The nonprofit has been holding foreclosure workshops to qualify owners since April. Residents have to be approved by July 13 and should call the group at 313-963-3310 ext 339 to start the process as soon as possible. "It's all about keeping people in their homes," said Ted Phillips, executive director of the United Community Housing Coalition. "We are thankful for Quicken's support. We couldn't do a million dollars worth of purchases without their money." There is a possibility they could run out of money to purchase homes if many apply, Phillips said. Homeowners who are in payment plans with the treasurer don't qualify, Steinberg said. The program is aimed those facing the foreclosure auction. "It's not a panacea," Steinberg said. "It doesn’t directly help people who are not currently in foreclosure or people who have already lost their houses. However, it’s a critical first step." Steinberg said there are ongoing discussions with foundations on how to help people in payment plans who could be facing foreclosure in the future. And he said the city has agreed to purchase foreclosed homes in 2019 and 2020 for those who qualify. Erica Burrell, a 35-year-old mother of two, hopes this means she'll be able to keep her west-side home. It's headed to the auction over $10,500 in tax debt. She and her husband purchased the home two years ago and the seller never told them of the outstanding debt. The couple's only income is her husband's disability payments from being shot as a child. "For the home to get snatched from us for someone else's debt is really crazy," Burrell said. "This is a blessing." The city will buy the properties by paying 60 percent of each home's unpaid tax bill. That includes the money that was due various governments agencies, including the county, schools and library. But it doesn't include the city's share of tax debt -- the other 40 percent. As a part of the agreement, the city is considering that debt a loss. It's not clear yet how much that will cost the city. The 2,000 properties facing the auction believed to be occupied by homeowners or renters owe $15 million. United Community Housing Coalition will then repay the city the 60 percent from the fund and sell the homes to owners for $1,000. That money will go into the fund managed by the nonprofit to help purchase homes in future years. Municipalities are able to buy foreclosed homes for the unpaid taxes before they are auctioned off, which in Wayne county happens annually in September and October. To take advantage, homeowners have to prove they could have qualified for the tax exemption between 2014 and 2017 but didn't receive one. If the homeowner qualifies this year for the tax break, they only have to sign a sworn statement they would have qualified in the past and won't have to produce old documentation proving their income, Steinberg said. The Detroit Citizens Board of Review will vet the applications. The ACLU maintained the city's application process for the tax exemption violated homeowner's due process rights, in part by setting an artificial deadline. Some applicants didn't get a reason for their denial and others didn't receive a response at all, according to the lawsuit. And residents who wanted to apply had to go to City Hall and fill out an application to get an application mailed to them, Steinberg said. Some never got the application in the mail or it came after the deadline, he said. He said the city has improved the process, putting the form in online. And they've agreed to mail a flyer about the program to a majority of residents yearly, reduce the documents homeowners are required to submit, as well as train all city staff who interact with residents about the process. The lawsuit, filed in 2016 by the ACLU, NAACP Legal Defense and Educational Fund Inc. and the Washington D.C. law firm Covington & Burling, originally was aimed at stopping the Wayne County Treasurer's annual tax foreclosure auction. But that aspect was dismissed by the courts. The ACLU had argued the office violated the Federal Fair Housing Act by disproportionately foreclosing on black homeowners, a process driven by Detroit's inflated city tax assessments. But last year, the Michigan Court of Appeals upheld a ruling by Wayne County Judge Robert Colombo, dismissing the county from the lawsuit because Colombo ruled it should have been brought in front of the Michigan Tax Tribunal. The city will pay five of the homeowner plaintiffs in the lawsuit $5,000 as a part of the settlement. UCHC and the city are expanding a separate program this year to buy foreclosed rentals and sell them to tenants. The nonprofit did that with 80 homes last year and hope to do several hundred this year with the city's help. Renters will have to pay about 70 percent of the tax debt over a year with no interest and put $500 down, Phillips said. The nonprofit has gotten $200,000 from JPMorgan Chase & Co. to purchase the homes and hopes to get other foundation money soon. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest
#1. To: Gatlin (#0)
Screw the seller. Didn't they do a title search? You can do it yourself online (for free) or pay an attorney $75 and he'll do it.
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