More Government Corruption in Foreclosure Actions

A federal judge today temporarily spared three families from getting evicted, giving them more time to pursue a lawsuit that claims Wayne County officials intentionally denied 18 homeowners —  and potentially hundreds more — a fair chance to pay their overdue taxes.

U.S. District Judge Judith Levy’s order applies to only  three homeowners — in Lincoln Park, Redford Township and Garden City —  who have not had eviction proceedings initiated against them. She concluded that she did not have jurisdiction over the 15  pending eviction cases.  Defendants have until Wednesday to respond; the plaintiffs have until Jan. 11.

The 15 other families are still battling eviction proceedings in local courts across Wayne County.

All 18 plaintiffs are still living in their homes, which are mortgage-free.

At the heart of this case are claims that the Wayne County Treasurer’s Office intentionally didn’t provide the homeowners with notices about overdue taxes, denied them payment plans they were entitled to and subsequently tricked them into a “default” status.

“We’ve concluded that this can be nothing but a malicious act,” said the plaintiffs’ attorney, Tarek Baydoun, who claims the county’s actions hurt poor and struggling families. “All of them are blue-collar folks with mortgage-free homes that their families bled and sweat for.”

Treasurer Richard Hathaway was not readily available for comment.

The lawsuit filed Monday in U.S. District Court alleges the 18 houses were illegally foreclosed upon, seized and sold to various real estate companies and investors for pennies on the dollar — without giving the homeowners a fair chance to pay up or bid at auction.

According to the lawsuit, all of the plaintiffs “qualified for the hardship agreements” but were  “deliberately misinformed  by the treasurer and staff” when they reached out for help.  Some were told they had time to pay their taxes and should wait until a specific time, although that wasn’t true, the lawsuit claims. Others were told that they did not qualify for payment plans when “they, in fact, did,” the suit said.

According to Baydoun, a key issue in the case is who actually owns the title to the homes: the original homeowners, or the investors to whom the county deeded the properties.

“They (the investors) have deeds to the home, but not the actual titles. And some got the deeds before they even paid; that’s what’s very significant,” Baydoun said.

According to Baydoun, the 18 homes are worth more than $1.5 million combined.

Baydoun cited the case of  Brandy Gutierrez, who signed a payment plan in December 2014 to pay off  roughly $6,300 in overdue taxes, interest and penalties.  According to the  lawsuit,  the county sold her home without telling her for roughly $5,300, even though she was making payments. The lawsuit said the home was worth more than $80,000.

“Her story is one of the most egregious ones,” Baydoun said. “That’s what happened in a lot of these cases.”

The lawsuit is seeking class-action status on behalf of roughly 800 homeowners. The current plaintiffs are from Dearborn, Garden City, Lincoln Park, Redford Township and Wayne.

Thus far, other homeowners who have taken their forfeiture claims against Wayne County to federal court have not been successful, as courts found that they were not entitled to relief in federal court. But in this case, the plaintiffs are claiming their federal due-process rights were violated.

As one of the plaintiffs, Garden City resident Paula Newcomb, told the judge in a Dec. 22 letter:

“My credit has been damaged by this illegal foreclosure. I am emotionally distressed, and I want to keep my home.” Newcomb said she tried to pay her overdue taxes in August, but was denied the opportunity.  “I am ready to pay any amounts I owe. I have been illegally denied equal protection and due process of law guaranteed by the laws and constitutions of the State of Michigan and the United States of America.”

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