ACLU loses bid to block Wayne County tax foreclosures

Oralandar Brand-Williams

A Wayne County judge denied the ACLU of Michigan’s request to halt Wayne County tax foreclosures, saying a moratorium would financially harm municipalities and school districts.

Judge Robert Colombo Jr. turned down the request by Michael Steinberg of the ACLU and his co-counsel for a halt to foreclosures of Detroiters’ homes and property.

Steinberg argued mass home and property foreclosures has “a gross disparate impact on people of color” and their communities, many of which lose property values because of blight and foreclosed properties. He said some of the owners “narrowly escaped” foreclosure this year because they entered into a tax payment plan. Still, he said, homeowners can find it difficult to keep up on payments since they still have to pay current and back taxes.

“If they don’t get some help they’ll be back in foreclosure this time next year,” Steinberg said.

Colombo asked Steinberg “what are we to do if people do not pay their taxes? ... The problem becomes bigger. City governments have to provide services such as police and fire.”

Coty Montag of the NAACP Legal Defense Fund in Washington, D.C., argued the “irreparable harm” caused to homeowners “trumps” the fiscal interests of the city and county governments.

County Treasurer Eric Sabree said he was pleased with Colombo’s ruling.

“The judge’s ruling will allow the Wayne County Treasurer’s Office to move forward as mandated and authorized by state law to auction homes for unpaid property taxes,” he said in a statement. “Proceeds from the auction are used primarily to fund numerous municipalities, key educational and public institutions in the city of Detroit and Wayne County.”

But Colombo denied a motion by the city of Detroit to dismiss a lawsuit filed against it to allow homeowners who wanted to claim “poverty exemption” status for tax payments be allowed to reapply for the designation, saying the application process is faulty.

Steinberg said "We're extremely pleased that the judge ruled that our case against the City of Detroit may go forward. Thousands of impoverished Detroiters have lost their homes over the past few years because the process for obtaining poverty exemptions is so convoluted. We are confident we can put an end to this injustice.

“Obviously, we're disappointed that the judge is allowing the tax foreclosure auction to proceed this month because more than 1,300 families' homes are going on the auction block because they were unable to pay unlawful taxes. However, we ultimately hope to prove that Wayne County's foreclosure policy violates the Fair Housing Act because it disproportionately impacts African-American homeowners."

Community activist and musician Errol Jennings, past president of the Historic Russell Woods neighborhood, said while Colombo’s rulings were “not a win for the people” it is encouraging that he set court dates for arguments about how to handle foreclosures in Wayne County.

“This is probably going to end up setting a national precedence,” Jennings said after Friday’s court hearing. “The system is broken but (county officials) have had time to work some of the things out.”

Steinberg, Shankar Duraiswamy of Covington & Burling and Montage also filed a class action lawsuit against the city, Wayne County and Sabree in July on behalf of seven Detroit homeowners and neighborhood organizations including the Historic Russell Woods-Sullivan Area Association, the MorningSide Community Association, the Oakman Boulevard Community Association and Neighbors Building Brightmoor.

The seven homeowners in the suit are not subject to auction of their homes in the upcoming county tax sale, said Davidde Stella, an attorney for Wayne County.

Stella said the county “doesn’t pass any laws.”

“We didn’t create any racial disparity in Wayne County,” Stella argued.

Colombo gave the ACLU until Sept. 30 to turn in its witness list. Wayne County attorneys will have to turn in their list by Oct. 21.

A settlement conference is scheduled for Jan. 17.

Trinity Smith, who has been in a two-year struggle to get her home out of tax foreclosure, hopes Friday’s court case will have a positive bearing on her own situation.

Smith says she bought her home in the Rosedale Park area for $25,000 cash but found out later a previous owner left behind a tax bill. She said another company bought her home after the county sold it for the back tax bill from 2011.

“Where would my son and I go,” Smith said. “It wasn’t my negligence.”

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