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Wayne County Treasurer Eric Sabree last month rejected a $200,000 foundation-funded plan that housing advocates say would have saved a potential 600 owner-occupied homes from this fall’s foreclosure auction.

Detroit’s McGregor Fund agreed in September to fund a proposal by the nonprofit, United Community Housing Coalition, that would have provided down payment assistance to help the homeowners enter payment plans before their homes could be sold off this fall.

But Sabree in September told the group the proposal wouldn’t work this year because it was completed after the county’s June deadline.

Word of the rejection of the $200,000 funding offer came to light at an event Saturday in Detroit sponsored by the Coalition to End Unconstitutional Tax Foreclosures.

Sabree’s decision has frustrated advocates fighting tax foreclosure, including those at the United Community Housing Coalition, who first pitched the proposal to the McGregor Fund in mid-August.

Ted Phillips, the housing coalition's executive director, said a staff member in the treasurer's office told him they would allow owners to enter into payment plans up until the first round of the auction ended in mid-September. He declined to name the staff person.

But as McGregor took the steps toward funding the plan in early September, Sabree told Phillips that his office couldn’t put owners into payment plans because the June deadline had passed, Phillips said. The auction ended Oct. 26.

The nonprofit is now shifting the $200,000 to help homeowners facing foreclosure next year.

“We are still using the money to help people in foreclosure,” Phillips said. “It’s frustrating we weren’t able to do that in September and October of this year.”

Sabree’s staff said the treasurer never heard directly from the McGregor Fund and that they widely communicated the June deadline.

“We feel we have to be consistent and fair with our guidelines,” said Mario Morrow, a spokesman for the county treasurer. “We had already indicated to several hundred people that the time had passed to get into a (payment plan).”

Phillips said the office has extended deadlines before. The treasurer’s office officially forecloses on properties in March but generally works through the summer to put owners on payment plans. If the treasurer was worried that it was unfair to allow some to apply for the payment plans after others had been told they couldn’t, they could have opened the process to everyone, Phillips said.

“Thankfully the deadlines have been moved throughout the year and that was a good thing,” Phillips said.

The McGregor funds would have gone to help owners with a down payment to get into an Interest Reduction Stipulated Payment Agreement. Under that plan, owners pay only 6 percent interest on their property tax debt, not the normal 18 percent.

Residents must pay 10 percent down on the base of the property taxes owed and then make monthly payments of 3 percent toward their back taxes.

Critics have argued tax foreclosures have been fueled by inflated city assessments and an inaccessible tax exemption for the poor.

An official from McGregor said they knew Phillips was working with a tight timeline but hoped that some owner occupants could have been helped this fall.

“We share everyone’s disappointment but we aren’t pointing fingers because we believe good faith work is underway,” said Kate Levin Markel, president of the McGregor Fund.

The total grant is for $500,000 over two years and is also aimed at helping renters living in houses facing foreclosure.

Bernadette Atuahene, a law professor at Illinois Institute of Technology’s Chicago-Kent College of Law who has studied the impact of the city’s assessments on homeowners, said the decision was “cruel, beyond cruel.”

“The people who were told they missed the deadline are the very same people who would be helped by the McGregor money,” Atuahene said. “We are talking about families.”

Tax foreclosures were down countywide this year from 14,300 in 2016 to about 6,800 as of the beginning of the tax foreclosure auctions in September, according to Sabree’s office.

“We have done a great deal to help people stay in their homes … advertising, outreach,” Morrow said. “At some point you have to follow the guidelines.”

Of those 6,800 properties,788 are believed to be owner-occupied Detroit homes as of mid-August, according to the treasurer’s office. Another 1,132 were estimated to be occupied by Detroit renters, county officials have said.

cmacdonald@detroitnews.com

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