Anti-foreclosure activists make last-ditch effort to spare thousands of Detroiters from eviction

Posted By Violet Ikonomova

  • Steve Neavling
  • A row of dilapidated houses at Crane and Charlevoix on Detroit’s east side. Eleven houses on this block have been foreclosed since 2002.

With time running out before the start of the second round of the Wayne County tax foreclosure auction, a small group of activists has made a last-ditch effort to get Detroit officials to intervene and keep the homes where people live from being sold.

The group, Moratorium Now!, is urging the city to exercise its so-called “right of first refusal” to pull up to 1,915 occupied Detroit homes with more than three years of unpaid taxes out of the auction. Some of those homes have already been sold in the first round of the auction, which was held in September. More will be sold starting Oct. 7.

“Most of [the people who are being foreclosed on] were subject to unconstitutional tax assessments and most of them should have been receiving poverty tax exemptions that never were afforded,” said Moratorium Now! organizer Jerome Goldberg, echoing the claims of a lawsuit filed against the city by the Civil Liberties Union of Michigan and the NAACP Legal Defense and Education Fund.

Goldberg argues the homes can be saved at no cost to the city by using money from the federal Hardest Hit Fund, which was designed to support homeowners in states pummeled by the housing crisis. He and other activists have suggested that the Michigan State Housing and Development Authority, which administers the Hardest Hit Funds, put some $8 million toward paying off what the city would owe the county if it were to pull the properties from the auction — assuming it would cost an average of $3,600 to rescue each home.
MSHDA has about $39 million left in its Loan Rescue program.

  • Violet Ikonomova
  • Moratorium Now! organizer Jerome Goldberg (center) and several other activists made their way through the Coleman A. Young Municipal Center Tuesday, urging Detroit city officials to save nearly 2,000 occupied properties from being sold at auction.

But the plan would require an amendment to the rules guiding how Hardest Hit Funds can be spent. Already, MSHDA has some of the most stringent requirements for homeowners to obtain assistance through the fund. A January audit from the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) found that more than 80 percent of Detroiters making $30,000 or less a year had been denied assistance to save their homes from tax or mortgage foreclosure. By contrast, the other 17 states with Hardest Hit Funds rejected 53 percent of homeowners making less than $30,000.

Still, MSHDA has said it would consider an amendment to allow money to go directly to the city of Detroit when it exercises its right of first refusal on foreclosed properties to be sold at auction. Any change would require approval from the U.S. Treasury Department.

Program rules have, to date, been amended 14 times, but the agency says it needs further follow up from housing advocates before it approaches Treasury about a rule change. MSHDA spokeswoman Katie Bach says any plan for the funds must be “sustainable” — meaning that a homeowner’s earnings must be high enough to show they can stay on track with housing payments. A household is not eligible for help if the payments would amount to more than 45 percent of its annual income.

With negotiations with MSHDA at a standstill and just days to go until the second round of the tax foreclosure auction, Goldberg and several other activists with Moratorium Now! on Tuesday suggested that the city purchase the properties from the county on a “credit buy” while it waits for MSHDA to act.

The activists went before Detroit City Council to make their case and later delivered a letter with the request to Mayor Mike Duggan’s office. Goldberg and housing advocates say they made the same rounds last month — hand-delivering letters that described their proposal to each council member’s office as well as the office of the mayor — and never received any response.

“We believe this is a practical solution,” said Goldberg. “Their refusal to acknowledge it either reflects incompetence … or it reflects an agenda to  remove more and more poor people from the neighborhoods of Detroit.”

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