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Detroit foreclosure buy-back expansion faces time crunch, funding uncertainty

Sarah Cwiek
Michigan Radio
Karen Russell, right, fills out paperwork with a United Community Housing Coalition staffer. Russell is hoping to buy the southwest Detroit home she's been renting for a year out of foreclosure through a city buy-back program.

Detroit expanded a program this year that gives some people a last-minute chance to avoid tax foreclosure, but its reach could be limited by time and money.

The program involves the city buying foreclosed properties back from Wayne County through a process called right of first refusal. The city then passes them on at reduced price to the United Community Housing Coalition, a non-profit group, which works out purchase prices and payment plans for participants to buy back their homes.

The city ran a small pilot buy-back program using right of first refusal last year. This year, it’s pledged to cover up to 300 eligible Detroit households living in foreclosed homes. And due to a recent legal settlement over the city’s past handling of tax foreclosure, it’s also expanded to include foreclosed homeowners who would have qualified for the city’s low-income property tax exemption, but did not receive it.

That settlement was only finalized July 2. But the Wayne County Treasurer has set a July 13deadline to pull the homes from the county’s annual tax auction, meaning some eligible residents had less than two weeks to hear about the program, pull together necessary paperwork, and submit it to the United Community Housing Coalition for processing.

The Coalition’s office was doing a brisk business on Wednesday, with staffers scrambling to help hopeful applicants fill out paperwork.

Shannon Robertson praised their efforts, calling the group “a great organization that does great work” with a limited staff and budget.

Robertson was there hoping to save the Detroit home that’s been in his family for nearly 50 years. This last-chance opportunity “means everything,” he said. “Our homes are the bedrocks of who we are.”

Michele Oberholtzer, coordinator of the UCHC tax foreclosure prevention project, says homeowners like Robertson who could have received the city’s poverty tax exemption “can probably qualify” for the buy-back program.

“And I say probably because you still have to complete the program requirements, you have to fill out the exemption application, you have to sign an affidavit saying you should’ve got [the exemption] in years past, you have to get here, we have to get to you, and then we also have to raise the money to fill the gap between the back taxes and ... the price that the person’s going to pay [for the home],” Oberholtzer said.

The program calls for the Coalition, working with the Quicken Loans Community Fund and other community groups, to raise the money necessary to pay for the city to buy the foreclosed homes. Per the  lawsuit settlement, the city will contribute $275,000 toward that effort this year.

Fundraising is one possible limitation. Another is “how many people we can even get to in an extremely short amount of time,” Oberholtzer said.

The city of Detroit has asked Wayne County Treasurer Eric Sabree to extend this week’s program deadline to July 31. On Wednesday, it was not clear whether he planned to grant that request. A Sabree spokesman did not immediately respond to Michigan Radio’s inquiries.

Given that uncertainty, “We’re just just trying to get in as much as we can as soon as we can, and hoping,” Oberholtzer said.

Michele Bell-Tillis is hoping she makes the cut. She’s been renting the same home for six years, but found out just recently her landlord had allowed it to go into tax foreclosure.

Bell-Tillis estimates she’s put around $6,000 worth of work into the home “with my bare hands.” She says owning the home would provide much-needed stability for her children.

“It would mean the world, my life,” Bell-Tillis said. “My mother died in that house. My everything is there. So it’s emotional for me.”

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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