For Victims of Foreclosure Following Massive Tax Sale
Mayor Sheldon Neeley is proposing to spend $50,000 in American Rescue Plan Act funds to provide legal help to residents facing foreclosure after the recent sale of a bundle of 230 occupied homes in and around Flint.
Neeley said on Friday, Oct. 20, that he’s asking the City Council to approve an emergency resolution next week to provide the funding to Legal Services of Eastern Michigan.
More than 80% of the homes that were sold together for $1.2 million at a Genesee County tax auction are in the city and occupants of those homes have received letters from the company that purchased the homes they occupy, advising them to make arrangements to become tenants or face eviction.
“This needs a community response,” Neeley said in a news conference on Friday. “We need to be able to support (people) and reduce harm for families.”
Jill Nylander, executive director of Legal Services, said her group has already begun fielding calls from occupants of the homes purchased by To Life Real Estate.
Although the homes were lost through the tax foreclosure process before they were sold at a September auction, Nylander said attorneys can help ensure that residents are renting homes that are in a safe and habitable condition before they agree to continue as tenants.
To Life’s purchase of the 230-home bundle took area officials by surprise, because occupied homes that have been bundled previously have never sold. This is because buyers do not want to pay for houses they do not want in order to get others that they do, officials said.
Genesee County Treasurer Deb Cherry has said none of the property bundles offered for sale during her 13 years in office had previously sold, but the To Life sale has caused officials to reconsider such sales in the future.
A representative of the company has told MLive-The Flint Journal that investors who recently incorporated To Life see hidden value in the properties, which are scattered throughout and around Flint.
The homes ended up in the auction sale after the county foreclosed on them after property taxes went unpaid for at least two years.
Cherry has previously used the bundled sales approach to shepherd some of those properties to the County Land Bank. This has allowed occupants of foreclosed properties to continue living in homes until they can be inspected and until arrangements are made for them to relocate or buy the houses they were inhabiting.
In the case of To Life, occupants of the houses received letters from the investor group just two weeks after the auction sale, according to letters obtained by MLive-The Flint Journal. The letters advised occupants to contact the company within seven days about rental options or to prepare for eviction.
Although the Land Bank was not a party to the most recent bundled sale, Executive Director Michael Freeman said Friday that To Life should proceed with caution as they take possession of the troubled properties and attempt to lease homes that may not be up to building codes.
“My concern is that a company or individual has already started putting together terms of rental when they don’t even know the condition of what they’re renting… That’s troubling to me,” Freeman said.
