The words “Catch-22” kept coming up.

Perhaps the first to utter them was a St. Paul legislative hearing officer, trudging through a difficult case earlier this month.

A disabled, 65-year-old man on dialysis. Couldn’t speak, after a heart operation decades ago. The year he got sick, the former foundry worker cashed in his meager 401K to pay off his Frogtown house in full — a house he bought off his mom — so at least he didn’t have that to worry about.

But he should’ve worried more.

“We’ve got a lot going on here,” said legislative hearing officer Marcia Moremond at the mid-October hearing.

Boy, did they. By the end of the hearing, the idea that Wesely Pettiford would keep that home was discussed with increasing skepticism. Instead, talk turned to shelters and having someone take the home off his hands, get at least a fraction of equity out of it.

The family wanted to pay the taxes, get the home back, get help fixing it up. But …that couldn’t happen until it was already fixed.

“You’d receive it back on contract for deed, and that contract has stipulations in it (getting it fixed), and you wouldn’t be able to meet those stipulations without the loan, and you can’t get the loan as long as it’s under contract,” Moremond said. “And so you’re in a Catch-22 situation.”

What began as a $1,541 unpaid property tax bill in mid-2018 had blossomed — in just more than a year — to Pettiford’s house being seized. Which — when he and his family tried to pay the taxes and repurchase it — prompted a damning city inspection. Which prompted his eviction.

Even county officials now say that what happened to Wesely Pettiford shouldn’t happen again. After being approached about the case by the Pioneer Press, they say they’re working to change their policies so that a foreclosed home can be worked on by somebody other than flippers who can afford to cover the cost themselves.

Also under scrutiny is a decades-old state law that actually makes it much easier to foreclose on properties in the city’s poorest neighborhoods — a policy that grates against the grain of current equity ideology.

It’s a policy that — due to a simple, significant mistake many homeowners make — Pettiford fell prey to.

“This is the case of a perfect storm,” said county commissioner Trista MatasCastillo, who is now helping the Pettifords navigate the county system. “And we want to be able to prevent it in the future.”

ACCELERATED FORECLOSURE

The speed with which the foreclosure happened to the home at 603 Edmund Avenue came as a shock to some St. Paul City Council members.

“I’ve seen it take years,” said City Council President Amy Brendmoen, referring to delinquent properties in her North End district. “That doesn’t make sense.”

Discussion of the former Pettiford property took up nearly an hour at an October council hearing.

Sitting in the audience was county auditor Chris Samuel. And it made sense to him.

Back in the 1980s, Minnesota’s Legislature drafted laws on how to spend money revitalizing poor neighborhoods. Specific neighborhoods would be “targeted” for those dollars by cities.

But the targeting turned out to be twofold: Some properties in those poor neighborhoods — including Frogtown — are now much more vulnerable to foreclosure.

For properties that aren’t homesteaded — owner-occupied — the foreclosure process dramatically accelerates, from a three-year time frame to just one.

Meant to target bad-faith landlords contributing to blight, in the case of Pettiford — who didn’t know about homesteading, even though he qualified — the result was devastating: the loss of a home he’d paid off with the entirety of his retirement savings.

Should Pettiford — a man one longtime neighbor called a “stabilizer of the neighborhood” — have known about those things? Sure, housing experts say — but his lack of knowledge is hardly unique.

“I think people don’t fully understand the potential implications of not homesteading,” said Julie Gugin, president of the Minnesota Homeownership Center. “We drill into people, the minute you close, you homestead it.”

Gugin questions whether the state law should use homesteading to identify bad landlords, given the possibility of collateral damage.

“If the goal is revitalization … I would think there would be some way of being a little more discerning,” Gugin said. Rental licensing data, for instance.

As for Pettiford’s situation, “It’s a question of how much warning he got,” Gugin said.

That’s a question for the family, too.

‘PAY UP,’ RATHER THAN ‘HOW CAN WE HELP?’

County officials point out that Pettiford received multiple letters — including one that was certified, either served by the sheriff’s department or attached to his door.

Notices were mailed to Pettiford’s home in early 2018 noting he owed back taxes. One, in March of that year, included a somewhat vague phrase — that if Pettiford wanted to “avoid losing your legal interest,” he should pay the roughly $1,500 he owed.

In March 2019, five months before Pettiford lost his home, the letters became more explicit: “If delinquent property taxes are not paid in full by August 2, the property will become subject to forfeiture to the state,” the letters read.

In reality, the foreclosure process had started in May 2018 — a yearlong process, county auditor Samuel said.

But the family, along with Gugin, asks why clerks at the county’s Plato building didn’t realize Pettiford — who visited in person repeatedly, unable to speak and obviously disabled, making partial payments that would essentially be fruitless in the foreclosure process — might need some help.

Certainly a clerk can’t tell if a person should pursue homesteading. But disabled people who are homesteaded receive an additional tax discount. Should they have mentioned that to the obviously disabled man about to lose his home?

“He didn’t understand that it’s not like a medical bill — it’s not something you just make payments on every month. He thought he’d just pay it, and pay it,” said Samantha Wright, a family member who is advocating for Wesely.

Two-hundred dollars in March, $95 in April, $200 in July. … Wright said Pettiford got his bank account as close to zero as he dared, with his dialysis copays eating up everything else.

The family is now looking to cover those copays with secondary insurance.

“It’s adversarial — ‘pay up,’ rather than ‘how can we help you keep your home?’ ” said Metric Giles, co-director of the Community Stabilization Project, a Frogtown nonprofit assisting the Pettifords.

Unable to speak, Pettiford sometimes wrote notes to the clerks.

“I was pay on it. I on a fix income so that I slow paying every month,” Pettiford wrote in August.

“Unfortunately — the state of MN now owns the property,” the clerk wrote back, “Do you have someone that can explain what has happened to you because now of this eviction?” They offered an office phone number.

‘WE’RE RETHINKING HOW WE DO THAT’

“So many things could’ve prevented this and so many things could’ve put this on a different trajectory, and here we are now. … I’m pretty frustrated at how this process has gone, and we’ll take a pretty close look at how we’ll fix it,” said commissioner MatasCastillo, who is working to rally county employees around the issue, which she says they have.

“Tax workers don’t normally talk to (county) social workers. And now we’re rethinking how we do that.”

County auditor Samuel said a restructure was starting even before the Pettiford case.

Earlier this year, the county revamped the departments that work at the tax counter: Staff who work for the recorder, the assessors and tax services are being trained on what those other departments do.

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Back in August, county manager Ryan O’Connor noted a big impetus for that: “One of the biggest things we hear is that depending on where in Ramsey County you live, some people feel like Ramsey County is a correctional, safety and justice system first — and other people in Ramsey County feel like it’s a golf course, ice arenas, libraries system first.

“I think it is striking, the juxtaposition.”

A VOTE FOR CONDEMNATION

On Monday, Pettiford was evicted. He and his 66-year-old brother, also living in the home, went to a hotel, paid for by the county for at least a few days.

It had been a frustrating two months. Immediately after Pettiford received the letter in August telling him he no longer owned his home, his extended family scrounged together enough money to pay his back taxes — which had racked up to roughly $4,400. They paid a $250 repurchasing fee.

Then the county called the city for an inspection. The home was now their responsibility.

The inspection didn’t go well.

City inspectors say the state of the house is not just a violation — it’s life-threatening. The chimney, especially, has cracks and gaps — opening up the possibility of carbon monoxide asphyxiation.

And the roof, the roof … with gaps where the gutters should be, pigeons nesting in the upper walls, plaster falling off the interior, a likely bastion of mold and rot.

Those inspectors could very well have saved Pettiford’s life, city officials say.

On Oct. 23, the city council voted to condemn it, with only member Jane Prince voting against. Pettiford had to be out.

On top of that, with the heightened level of condemnation, the family now has to fix not just the problems cited in the initial report but bring the house fully up to code, from foundation to shingles.

“Once you get that designation, all bets are off,” Giles said. “Most people do not recover from a vacant house status, especially a home of that age.”

During the hearing, some council members questioned the cost to the Pettifords and appeared open to an appeal for a less stringent code standard. The family plans to make that appeal in coming weeks.

A CATCH-22

But as for getting someone in to do the work, that’s where the “Catch-22” comes in.

Normally, you can’t get a loan for work on a foreclosed home until you own it, and you can’t own it until the work is done.

But the Pettiford case has made the county rethink that.

“Historically we would not allow (construction) liens to be placed against state property. We’re looking at the possibility,” county auditor Samuel said. “We realize the Catch-22 that exists now, where you already have to have the resources, favors flippers and developers.”

One such flipper approached Pettiford offering to pay $20,000 for the property, currently valued at $100,800.

Still, the policy revamp will take time: the county has to protect both itself and potential buyers from bad-faith lenders that would put such homes deeply underwater.

Also, “Someone could take out a home equity loan and walk away with the money,” Samuel said.

The Pettifords have approached Neighborhood Works, a nonprofit which offers largely forgivable loans up to $85,000 for rehabs in certain areas of the city.

County officials now say they’ll make accommodations for Neighborhood Works to get into Pettiford’s home to do work if he repurchases the home — in effect, preemptively applying their policy revamp in this case.

Still, many — including Neighborhood Works — wonder whether the cost will be too high, given the heightened code work now being called for.

‘YOU CAN’T UNSEE IT’

At Moremond’s hearing, county officials said they believed the house needs a top-to-bottom rehab.

But Giles bristles at what he believes are exaggerated claims.

Yes, the house needs code work — even significant work — but you could send inspectors into every house on Pettiford’s street and easily half of them would have five or six figures worth of code violations.

“That’d be 50 percent of that block,” said Carolyn Brown, co-director of the stabilization project, whose office is only a few blocks away.

Want to figure out a way to create more homelessness and displacement in a state with stricter – and more expensive – building codes than any surrounding state? In an area around the Green Line already seeing significant displacement? In a state that laments its lack of affordable housing? That’s a good way to do it, Giles and Brown say.

Travis Bistodeau, the deputy director of the city’s safety and inspections department who has met with Giles and the Pettifords, says he sympathizes. But the city can’t simply ignore life-threatening code violations once they know of them. On top of morality, there’s liability.

“You can’t unsee it,” Brendmoen agreed.

Bistodeau also notes that the city’s vacant building program has significantly reduced blight. In 2010, right after the recession, there were just over 2,000 vacants. Today there are 501.

“A lot of these are being rehabilitated,” Bistodeau said.

Whether or not the house is savable, county officials worked last week with the stabilization project to use one of the project’s homes for temporary housing — solving, for now, the homeless problem.

Additionally, county auditor Samuel has asked the assessor’s office to put in a hardship abatement on the property, potentially lowering the taxes due by thousands.

“This case allows me to walk through step-by-step what has happened, what can happen,” said MatasCastillo. “This is not just the county. This is the county, the city, all of those processes. How do we come together?”

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With new shops and street improvements, Saturday’s ‘Rice and LarpenTOUR’ showcases three cities Even Giles, who’s clashed heavily with the county over property issues, now says, “I’m seeing with this (county) leadership that they are looking at the impact, and trying to do the least harm. They’re actually taking a look at what they’re doing.”

Still, Brown added, “We have a broken system. What happened with Wesely needs to be in the forefront of the elderly and disability community. To let families know what can happen, just in case.”