There’s the old joke about how the best way to rob a bank is to be its executive. That seems to be playing out in Wayne County, which has one of the country’s largest foreclosure auctions. Although rules ban family members from participating, it turns out that the family of the Wayne Country treasurer, Eric Sabree, has been buying the choicest properties at bargain basement prices. His wife, his sons, even a nephew and his former real estate company — U.S. Development Services — have all benefited.
A Detroit News investigation uncovered several cases where Sabree’s former real estate company — now operated by his wife — bought properties at the auction and often violate the terms by being delinquent in paying the taxes.
The Detroit News article found ten properties owned by U.S. Development Services that were three years behind in their taxes. The ten owed $29,000 in taxes as of November 2018, and the company only paid up after the Detroit News made an inquiry. It’s unclear how at least one of the ten avoided being sold in the auction.
Claiming he was not involved with these transactions, Sabree nonetheless sees the rule against family members bidding in the auction as “intrusive and unrealistic” according to News reporter Christine MacDonald and intends to allow it in the 2019 auction.
The Detroit Free Press Editorial Board called for Sabree’s dismissal, pointing to his arrogance when confronted by his family’s gain. With at least 450 occupied homes facing foreclosure in 2018, the editorial noted:
“Wayne County’s tax foreclosure auction has done untold damage to the city of Detroit. Around 150,000 Detroit homes were foreclosed for delinquent taxes between 2005 and 2017, Detroit data firm Loveland found, nearly one third of all the properties in the city. Tens of thousands of homes, some of them occupied, have been auctioned during that span. At least 10,000 of those homes shouldn’t have been foreclosed; their owners were eligible for a poverty exemption and shouldn’t have had to pay property tax at all.
“It’s not always clear why some tax-delinquent properties are foreclosed and auctioned, and others aren’t. These are decisions the treasurer’s office makes behind closed doors.”
Foreclosures have all too often resulted from inflated assessments and hiding the poverty tax exemption application from more than 35,000 homeowners who qualify. Poverty exemptions are only good for one year and are not retroactive. Homeowners who have been foreclosed on have also complained that they had not been notified and therefore had no opportunity to redeem their home.
Homes sold in the auction frequently sink into blight and taxes pile up until another foreclosure and another auction — or a demolition. The auction does not function to revitalize our communities but mostly to give speculators a chance. Given the scandal, it’s clear that the flawed and unjust system of foreclosure followed by an auction must be scrapped.