When Charemon Brooks found out her house had been foreclosed, she could feel her heart tighten. A faint buzzing rattled her eardrums. It was like she was underwater.

Brooks knew she had missed a couple of months on her tax payment plan. Her husband's mother had passed away in the spring. Extra money had gone toward the funeral arrangement. It had been tight.

But now she was here, at a remote-payment center off Grand River, ready to make a payment. How, the 56-year-old wanted to know, could this machine be telling her that her house was no longer hers? The pressure felt overwhelming.

For nearly three decades, 1161 Seward, a large brick duplex on a quiet, tree-lined street just north of the Fisher Building in New Center, had been in her family. First, it belonged to her dad’s cousin. Then her dad. Then her and her husband. Since 2016, her eldest sons had called it home. Maintaining it, keeping up with repairs, retaining the family’s legacy were priorities. It’s why, when times got rough a few years back, Brooks had signed up for a tax payment plan to make sure she would never lose it. It’s why on a sticky afternoon in August she was attempting to make good on that commitment.

Rushing to the Wayne County Treasurer's Office, Brooks searched for answers.

While it was too late to pay the $1,106 necessary to redeem the house, a teller explained, Brooks was in fact lucky. Her home, she was told, had been selected for the Wayne County Land Bank’s "Action Before Auction" program. The house would be pulled by the county using Right of Refusal — a provision that lets government entities snag foreclosed homes before the public sale — and then sold to a developer, who would sell it back to her. The county, she was told, was working to “keep residents in their homes.”

Brooks took her first real breath in three hours. She had hooked a lifeline. Cross some T's. Dot some I's. In no time the house would be back in her name. Or so she was led to believe.

Show caption Hide caption Charemon Brooks leaves her family home while her son Jalin Brooks shovels ice and snow from the front porch on Tuesday, Feb. 12, 2019 in... Charemon Brooks leaves her family home while her son Jalin Brooks shovels ice and snow from the front porch on Tuesday, Feb. 12, 2019 in Detroit. Charemon's home went into foreclosure and before she could buy it back, the house was sold to a developer. Brooks' two sons now live in the house and are unsure of their future. Elaine Cromie

Fast-forward six months and Brooks and her sons who live in the house — Jaloni, 28, and Jalin, 26 — are spending their mornings at 36th District Court. In January, the developer that the Wayne County Land Bank sold her house to, FPJ Investments, filed an eviction complaint.

"They clearly," Brooks said on a chilly February morning, days before her first court appearance, "have no intent on trying to sell the house back at all."

While an attorney filed a complaint on Brooks' behalf alleging that the Wayne County Land Bank and FPJ Investments are not following the program's own protocol for re-selling homes back to occupants, the reality is the Brooks scenario is not an isolated incident. It's one of many.

A Free Press examination of the Wayne County Land Bank’s “Action Before Auction” program, which pulled 240 properties in 2018 and 141 in 2017, raises a host of serious questions. While the program incited cries of favoritism in its first year, because the Land Bank handpicked the first nine developers without issuing an RFP (request for proposal), a deeper look at the program highlights more widespread problems. Despite the Land Bank instituting an application for year two, what exists is an unwieldy and chaotic initiative that promotes itself as an effort to stop the negative consequences of the yearly auction — blight, vacancy, speculation and displacement — but has, in fact, contributed to all four of these phenomena, while enriching developers and giving little-understood financial benefit to the county.

Internal documents, emails with the Wayne County Land Bank, and interviews with occupants from both years of the program highlight four trends:

Few occupants have a real shot at reclaiming their homes. People are being deemed "ineligible occupants" by either the developer or the Wayne County Land Bank for minor and convoluted reasons. And when found "eligible" many can't overcome the additional barriers the Land Bank has set up, such as the $5,000 fee developers are allowed to tack on to the new sale price.

People are being deemed "ineligible occupants" by either the developer or the Wayne County Land Bank for minor and convoluted reasons. And when found "eligible" many can't overcome the additional barriers the Land Bank has set up, such as the $5,000 fee developers are allowed to tack on to the new sale price. Developers are being sold properties for pennies on the dollar and making significant profits. According to an August county analysis, in 2017, developers spent roughly $1.5 million purchasing 141 properties and of that number they sold or listed 44 properties for $4.5 million. While the report noted that developers spent money investing in some of the properties before the sales/listings the potential profit margin, it said, was nearly $3 million with 97 properties still left to "monetize."

According to an August county analysis, in 2017, developers spent roughly $1.5 million purchasing 141 properties and of that number they sold or listed 44 properties for $4.5 million. While the report noted that developers spent money investing in some of the properties before the sales/listings the potential profit margin, it said, was nearly $3 million with 97 properties still left to "monetize." The Wayne County Land Bank is giving developers remarkable flexibility within the program. Multiple developers were approved for year two of the program despite being delinquent on taxes for properties they purchased in year one.

Multiple developers were approved for year two of the program despite being delinquent on taxes for properties they purchased in year one. There is little-understood financial benefit for the county. The Wayne County Land Bank will bring in about a million dollars total from the 2017 and 2018 program (admin fees, plus 50 percent of all future taxes on the pulled properties for five years). None of this goes to the county's general fund, as auction sales do. The commissioners' summer analysis also noted that the county was, in fact, losing money because many of the properties developers pulled were highly-desirable and therefore would have likely sold for more than the minimum bid at auction.

The Wayne County Land Bank vehemently disputes these findings, contending that its program is a better option and outcome than the annual auction. Any inability to find former occupants eligible is limited by the participant purchase agreements it created for the program, said Daniel Rosenbaum, the Executive Director of the Wayne County Land Bank.

"We far exceeded the red-line requirements found elsewhere in the foreclosure process," Rosenbaum wrote in a statement Wednesday, later adding, "We took these efforts with the concerted aim of helping people affected by foreclosure. However, ultimately, our power was limited by the terms of the Program’s purchase agreements. These agreements represented legal contracts, approved by our Board of Directors and by Wayne County. If we found someone eligible without any basis in the agreement, we’d be stepping outside our legal authority."

Rosenbaum additionally, disputes the accuracy of the County Commission analysis, saying its information regarding profit was outdated and didn't take into account the extent of developer investment.

However, when the Free Press did a February analysis of the program, it found multiple examples of windfall gains.

Take, for example, FPJ Investments, which is run by Jim Budziak of Grosse Pointe Park, and was registered with the state of Michigan by Budziak's neighbor, attorney Matthew Schenk, a creator of the Wayne County Land Bank, and the former chief of staff to former Wayne County Executive Robert Ficano.

In 2017, the first year of the program, FPJ Investments purchased a total of 40 properties from the Wayne County Land Bank in several bundles for just over $550,000 (the average sale price, which amounted to the taxes owed plus an administrative fee, was just under $14,000). Of those properties,17 were in Detroit — meaning it spent, using that average figure, about $235,000 in the city.

The August 2018 county analysis, which Rosenbaum said is outdated, indicated that the company had started investments on all but two of their Detroit properties — amounting to a total of $398,651. As of February 2019, the company had sold 12 of the 17 properties for $1.89 million. Even if FPJ doubled this investment — going well over the $25,000 investment requirement stipulated for each vacant property — it would still make a profit of just under a million dollars, with several properties still left to sell.

Additionally, while 16 out of the 17 properties were occupied, according to data from the Wayne County Treasurer's Office, only two of the 12 homes went to former occupants. Both were sold at up marks, with one former occupant repurchasing her condo for more than $9,500; her delinquent taxes had been $2,822.

On top of this, in 2018, FPJ Investments was approved to purchase 29 more properties. This comes in spite of the fact that according to the county's August fiscal analysis, the company owed $7,378 in taxes for one of its properties in Dearborn Heights when its RFP response was approved in spring 2018.

Jim Budziak, the owner of FPJ Investments, declined to speak on the record stating the pending litigation with Brooks and other occupants. However, in a brief email to the Free Press, he wrote that he believed the program was successful.

"There can be no doubt that programs such as AB4A (Action Before Auction) have better outcomes than the traditional tax sale auction," he wrote.

Housing advocates and those working around the program, however, are skeptical.

"It doesn’t make any sense either from the perspective of the stated goals of the program to keep residents of the city in their homes or just from the standpoint of a governmental entity that wants to save taxpayer money," said Joe McGuire, an attorney representing Brooks and several other individuals in similar positions.

As McGuire points out, Brooks' duplex was sold to FPJ Investments for just over $4,000 — the total back taxes plus an administrative fee of $500. When Brooks and her sons inquired about purchasing it, the Wayne County Land Bank said duplexes couldn’t be resold. If the county isn't adamant about keeping current occupants in the home, points out McGuire, it would make more sense, fiscally, to sell it at the auction.

Peter Hammer You look at this program. The best you can say is it lacks coherence, and no clear public policy objectives. It’s dysfunctional if it’s trying to help individuals who are in the houses that they may lose, and it’s incredibly subject to abuse. I think that’s the kindest way to portray it. Quote icon

"You think, 'OK, maybe they are doing this because they want to keep people in their homes.’ But then they end up telling the people in the homes that they’re not eligible because it’s a multi-unit building. Well, if they’re not eligible because it’s a multi-unit building, why was it sold for next to nothing under that program if it wasn’t the type of building that was intended to be sold under that program? It doesn’t make any sense."

For critics, like McGuire, and those fighting to keep their homes, the Action Before Auction program has come to represent a new vehicle for displacement — a program that allows developers to profit heavily, with few known benefits for the county other than new occupants in these homes. Occupants that aren't cash-poor. Occupants who won't struggle to pay their taxes. Occupants whose purchase of the houses from the developers can push up comp prices, and assessments.

“It just seems like you’re manipulating the auction," said Peter Hammer, a law professor at Wayne State University and the director of the Damon J. Keith Center on campus. "You look at this program. The best you can say is it lacks coherence and no clear public policy objectives. It’s dysfunctional if it’s trying to help individuals who are in the houses that they may lose, and it’s incredibly subject to abuse. I think that’s the kindest way to portray it.”

Better than the auction?

While the county and the land bank are aware of these critiques, they maintain that the program is a success.

“I think it’s valuable to reiterate that every property in the program was, otherwise, headed to the tax-foreclosure auction. The auction does not provide any opportunities for residents or protections against speculation. Instead, a person who buys property at the auction can immediately begin an eviction proceeding,” Rosenbaum wrote in an email last month before noting the two talking points that the organization touts as evidence of its success.

First: During the first year of the program, there were 64 occupied properties, and of that number, 48 — or 75 percent — received “formal opportunities” under the program. Second: The Land Bank has verified over $5.2 million in investment on vacant properties under the 2017 program.

These statistics, however, are misleading.

An offer agreement does not mean the occupant bought the house. It simply means they were given one of three options: a purchase offer (which would be priced at the taxes owed plus up to $5,000), a rental offer (which would be the current rent price, but for only a year lease), or $5,000 cash for keys. In reality, only 20 percent of occupants bought a home through the program that first year.

Show caption Hide caption Freddie Alexander, 69, of Detroit stands in front of his former investment property that was acquired and sold by the Wayne County Land Bank because... Freddie Alexander, 69, of Detroit stands in front of his former investment property that was acquired and sold by the Wayne County Land Bank because of delinquent taxes. He thought he was on a payment plan with the City of Detroit. Alexander is photographed in front of the condo on Thursday, Feb. 28, 2019. Kimberly P. Mitchell, Detroit Free Press

Verified investments are also tricky. The county's summer analysis of the program noted that while Action Before Auction requires developers to invest $25,000 in their vacant buildings, the majority of the work that was done the first year was on the interior of the properties. “... due to the nature of the program, the Land Bank has no way of verifying what improvements, if any, were made to the properties as it is unable to enter the properties and conduct inspections,” the analysis stated.

Still, Rosenbaum maintains the Action Before Auction program results in better outcomes than the auction.

"There are a range of outcomes but at the very, very least our program does something more for residents of properties than the auction does," Rosenbaum said in a phone interview last month. "At the very, very least it does something more."

His predecessor, Bali Kumar, who ran the Wayne County Land Bank from October 2017 till summer 2018, is also aware of the criticisms but maintains the program has the best of intentions.

"I think policy making and the creation of these sorts of programs is tough because you’re always balancing lots of different, valid equities and trying to find the right middle path that appeases all parties, but nothing appeases all parties," said Kumar, who inherited the county's Right of Refusal program months after it started.

Kumar views the program as being filled with tension.

"Some occupants that don’t get to stay or repurchase are going to be upset, because the program doesn’t allow for all occupants to repurchase," he said arguing that on the other side are "neighbors and people in the neighborhood are going to be upset if the property does get sold back to an occupant who doesn’t invest tens of thousands of dollars into the property to bring up comps in the neighborhood to bring up their property values, so their land is worth more."

He added that the land bank also must balance short-term and long-term goals for the county.

Selling it in the auction would bring in more money for Wayne County, he concedes, but then there is always the looming chance of a speculator swooping in.

"That," he said, would ultimately, "bring in less money for the county.

"I guess my perspective is trying to create a better outcome then going to auction and sometimes that outcome is marginally better, like slightly better, and sometimes it is much better where someone gets to repurchase their home," he said. "The program is just devised to create as many marginally better and as many much better outcomes then auction as possible."

Michele Oberholtzer If you're going to intervene on the auction, you should do better than it. And if you do something with the pretense of public service, then you should uphold that. Don't make this about homeownership if it's about investor cherry-picking. Quote icon

Critics, however, contend that doing just "better" than the auction isn't enough.

“If you're going to intervene on the auction, you should do better than it,” said Michele Oberholtzer, director of the Tax Foreclosure Prevention Project at United Community Housing Coalition (UCHC), a local non profit that helps people navigate tax foreclosure and ideally stay in their homes.

As Oberholtzer sees it, the county could essentially have created the program however they wanted to. Barring people from being eligible to repurchase their homes because they missed DTE bills or because of self-created deadlines is purely within the control of the Wayne County Land Bank.

“The thing is, they can make this program however they want. If you do something with the pretense of public service, then you should uphold that. Don't make this about home ownership if it's about investor cherry-picking," she said, adding that in some cases people would have in fact been better off with their homes going to auction, where third parties like UCHC could at least bid on them, or just being scooped up in some other fashion.

Ted Philips, the director of UCHC, said red flags were raised for him around the program this summer.

According to Philips, a mother of two came to his office who had gotten behind on taxes following confusion with her land contract. The house — a brick home in Virginia Park— had been foreclosed and so Philips went to see whether the City of Detroit, which does its own Right of Refusal program called Make it Home, could pull her house.

Like the county, the city initiative pulls occupied homes. Unlike the county program, the occupants of the home are the "participants" — not developers.

When Philips went to see whether the city could, belatedly, pull this woman’s home, he found out the Wayne County Land Bank had already requested to pull the house. They refused to relinquish it.

The county’s stance, according to Phillips, was particularly odd because the city’s Right of Refusal program is a better deal for occupants. Not only is no developer fee — up to $5,000 — tacked on to the sale price, but when the city purchases a property with Right of Refusal it pays the back taxes minus the amount owed to the city. This reduced price then becomes the sale price for the occupants. Additionally, while the city’s program gives occupants a year to pay back the sale price, the Action Before Auction program allows developers to require payment within six months.

“I was sort of then flabbergasted when we had a few conflicts like the legal secretary,” said Phillips referring to the mother of two’s case. “The Wayne County Land Bank’s position was, ‘No, we got there first.’ Well, is the goal to keep people in their homes? Or is the goal to find a profit for the investor?”

Ultimately, the woman, who had owed $2,771 in taxes, ended up paying over $7,000 to get her home back from National Faith Homebuyers, a local non profit that has purchased 47 properties from the Wayne County Land Bank over the course of the program’s two years.

“The minor nuance between which Right of Refusal program she was entered into was the difference between getting to buy her home for under $2,000 and having to pay over $7,000 for it,” said Oberholtzer. “And if the residents of the other Wayne County Land Bank homes are any indication, she is lucky to have even had the opportunity to purchase it at all.”

It's a confusing system

Whether it's intentionally designed this way, or simply bureaucratic clunkiness, the Action Before Auction program is confusing. The guide for participants, which was created for year two, is 75 pages and is replete with complicated jargon and typos.

The general gist, however, goes as follows: Select developers and non profits (nine handpicked the first year, 12 selected via a Request for Proposal) are given a list of foreclosed properties in the county. They then submit a list to the Wayne County Land Bank of what properties they are interested in buying for the owed back taxes and a small admin fee. Once the land bank finalizes a list of who is getting what, the Wayne County Commissioners exercise their Right of Refusal and pull the properties. At this point, the “participant” enters into a purchase agreement with the Wayne County Land Bank, and they are expected to check whether the properties have occupants, and, if so, whether the occupants are eligible for an offer.

What complicates the program is the fact that in year two, the Wayne County Land Bank decided to create two different "tracks" that properties get slotted into.

Track A is for occupied homes, and was pitched as an almost automatic funnel for homes to go back to the occupants. Track B is for unoccupied homes, and occupied homes that didn’t make it into Track A, because of a lack of, as Rosenbaum puts it, "philanthropy."

The tracks have different stipulations for occupants to be eligible to purchase or rent their homes back.

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"One track is intended to be purely philanthropic," said Rosenbaum. "We make clear to participants, you are going to lose money on this track of the program, and the other track, our goal is to leverage private investments. We want to get private investment to rehab vacant homes and we don’t want people to lose money and run away from the program."

What complicates and confuses the program is the fact that developers and the Wayne County Land Bank slot properties into tracks without visiting the houses first or finding out, conclusively, whether there are occupants inside. This means many occupied homes are going to Track B, where eligibility requirements are more rigid and buyback prices are higher. It also means developers are being required to do $25,000 worth of work on properties, regardless of their condition.

No matter what track the homes are in, however, a common trend has been occupants hitting walls when it comes to proving eligibility to either repurchase or rent their homes back. There is little incentive for developers to find occupants eligible.

Track A failure

Brooks wouldn’t have known it based on her treatment by FPJ Investments and the Wayne County Land Bank, but her home, 1161 Seward, was in Track A. The track where developers, according to Rosenbaum, are supposed to lose money. The track that’s supposed to let homeowners keep their homes.

Under Track A, the requirements of eligibility are broad: Any person living on the property at the time of foreclosure who came to the property by legal means; no evidence of intentional fraud tied to the property; no bad-faith with respect to non payment of taxes on the property; no participation in another Right of Refusal program in a prior year.

Jalin Brooks, 26, shovels ice and snow from the front pathway on Tuesday, Feb. 12, 2019 in Detroit. Elaine Cromie

While Brooks was deemed ineligible from the jump because she and her husband didn’t live in the house, her sons Jaloni and Jalin were there, as were their two friends who were staying as tenants upstairs. It seemed, given the requirements, which Brooks had to find online herself, that the house would go back to them.

On Sept.18, Brooks sent one in a series of emails to the Wayne County Land Bank.

"I really need to sit down with someone," she wrote to Melissa Palepu, the organization’s attorney, adding that she was "lost on some of the technical terms."

Palepu wrote back two days later saying they had heard Brooks had retained counsel — Brooks had asked an attorney at her work to help her figure out what was going on. "Land Bank policy regarding individuals represented by counsel is to only speak with counsel going forward," Palepu wrote.

After the attorney wrote to find out what needed to happen to get the property back into his client's hands, Palepu wrote that the "property was foreclosed due to nonpayment of taxes. The Land Bank does not own this property but is monitoring a program in which the property is a part of. I do not believe this property will be sold to the prior owners."

On Oct. 5, after Brooks decided to terminate her relationship with the work attorney, she reached out to Palepu again, asking to know the name of the program her house was purchased under. She was still confused and lacking information. Palepu wrote back that day simply stating that the program was called Action Before Auction. She provided no links or further information.

Charemon Brooks poses for a photograph inside her family home that has been foreclosed on and sold to a developer on Tuesday, Feb. 12, 2019 in Detroit. Elaine Cromie

A week and a half later, on Oct. 16, after Brooks had found information online, she emailed Palepu to find out what track her home was in. "This Property is in Track A of the program," Palepu responded, with no additional information regarding eligibility.

Two days later, on Oct. 18, Brooks wrote Palepu again. Jaloni had asked Palepu about buying the house and she had said it wouldn’t be fair if one resident was able to buy it and not the others. Brooks told Palepu that her son had spoken to the other tenants (Jalin, and their two friends) and they wanted to know whether they could buy the property together — each would get one of the four units.

Palepu responded an hour later. "With respect to this property it is unlikely that the tenants will have a purchase opportunity," she wrote. "The result would likely be a rental opportunity given the nature of the building."

Before Brooks had even received this response, she emailed Palepu again. Her anxiety kicking in with regards to the future of this home that her sons lived in, that had been in her family for three decades. How was it going to become something they rented?

"Hypothetical question," she wrote, "if I offered FPJ $15k cash (about 5 times what he paid for my property). Could he (if he wanted to) sell me the property back?"

"No I'm sorry that would not be an option for this property," Palepu responded. "FPJ could sell the property at the conclusion of our contract with them, so long as they complete all of their obligations. However, FPJ is required to invest [sic] at minimum, $25,000.00 into the property."

While Brooks didn’t realize this at the time, Palepu’s response about the $25,000 requirement is peculiar since Track A homes do not have any investment requirement. They are supposed to be homes that, as Rosenbaum explained it, get back to the occupants fairly easily.

Palepu finished this email telling Brooks she didn’t want to get into any speculation.

“He [Budziak] can put it on the market after that obligation has been met. I don't really want to get in to hypothetical answers until after we determine eligibility of the occupants. That is really the primary focus for the Land Bank, with rehab requirements coming after the eligibility has been determined."

Over the course of the rest of the month Jalin and Jaloni — and the other two tenants — sent over rental receipts, lease agreements, and DTE bills — documents the Wayne County Land Bank requested to prove their occupancy.

Show caption Hide caption Jaloni Brooks, 28, left, and his brother Jalin Brooks, 26, sit in their living room playing guitar and singing before heading to work on Tuesday,... Jaloni Brooks, 28, left, and his brother Jalin Brooks, 26, sit in their living room playing guitar and singing before heading to work on Tuesday, Feb. 12, 2019 in Detroit. Their family home went into foreclosure and before it could be bought back, it was sold to a developer. The Brooks are in limbo and waiting on the developer's decision whether or not to evict the tenants. Elaine Cromie

On Nov. 1, as Brooks was beginning to understand how this situation was going to pan out — out of her favor — she sent Palepu another email.

"It really does not appear that WCLB Municipal [sic] is trying to help the homeowners keep their homes. It appears you are trying to help the Investors. Thanks for the attention you have given. For future foreclosures guidelines, options, expectations should be in writing and clearly defined."

The next day, Palepu wrote back, exactly what Brooks had come to expect.

"This Property will not be eligible to be sold to any occupant," the attorney wrote, adding that "If this were a single family home and the occupant were eligible, they would have the opportunity to purchase the home. That is not the case with this property."

The Action Before Auction guidelines never mention anything about only single-family homes being eligible for resale.

The email did not stop there. Palepu went on to accuse the Brooks family of forging the rental receipts the Land Bank had requested to verify Jaloni and Jalin’s occupancy.

"Second, I did receive rental receipts that I do not completely believe the veracity of for three reasons. (1) most appear to be written at same time based upon penmanship and ink color and (2) there is one for 10/18/18 which should not be there and (3) the order of the receipts are such that they are one directly after another and there was allegedly another tenant that is not accounted for in the order. If rental receipts did not exist I would rather have just been told there are no rental receipts. This is my opinion regarding the rental receipts based upon the totality of the circumstances."

The accusation, in the view of McGuire, could be useful for the Land Bank and FPJ. There are only two rules of eligibility under Track A: One must live in the house, and one must not commit fraud. If the Land Bank and FPJ couldn't find the brothers ineligible via the former, here was an allegation of the latter.

Palepu ended her email stating that she was sorry for any confusion with regards to the property, explaining that when she had told Brooks that someone could purchase the house she "was under the assumption that it was single-family home."

Ultimately, the two upstairs tenants were given an offer to rent — at their current rate for one year with no option to renew the lease — or $5,000 cash for keys with a move out date of March 11. They took the latter.

Jaloni was deemed ineligible for an offer. Brooks believes this is because his ID doesn’t have the Seward address on it — something she says the 28-year-old had neglected to change.

Jalin was given the same options as upstairs tenants — rent for a year, or cash for keys.

Show caption Hide caption Jalin Brooks, 26, poses for a photograph inside his home that has been foreclosed on and sold to a developer on Tuesday, Feb. 12, 2019... Jalin Brooks, 26, poses for a photograph inside his home that has been foreclosed on and sold to a developer on Tuesday, Feb. 12, 2019 in Detroit. The Brooks are in limbo and waiting on the developer's decision whether or not to evict the tenants. Elaine Cromie

But after McGuire filed the complaint against the county and FPJ Investments, Budziak called, according to Brooks, and had a new, unusual offer. He said he would sign over to Jalin a condo within 2599 W McNichols — a property he acquired in year one of the program. A property that had been occupied, according to data from the treasurer's office, and had been lost over $4,185 in back taxes.

"He called the same day they got served," said Brooks, who notes Jalin has not made any decision on the unorthodox offer. "We just want our home back."

According to Brooks, she still does not know conclusively why her sons were deemed ineligible to purchase the home back.

The Wayne County Land Bank would not comment on the record why the Brooks brothers were ineligible to purchase the house, citing the complaint McGuire filed against them as their reason for not being able to discuss the case.

But Rosenbaum was keen to "emphasize" that "when reviewing the documents on this property, we did discover evidence of potential criminal activity that would directly affect eligibility. So that is one thing I can say."

When asked to clarify, Rosenbaum would only say "criminal fraud."

For McGuire, the whole saga is indicative of the entire program’s flaws.

"Why is the Land Bank seeming to find any reason that they can to find people ineligible?" he questioned.

When the Michigan Legal Services attorney first heard about the situation he said he assumed developers weren't upholding their responsibilities to accurately confirm eligibility, and the Wayne County Land Bank was simply not doing its due diligence to confirm the developers' findings.

It wasn't until be began digging further into his clients' cases that he realized this wasn't a passive interaction on the part of the land bank.

"The more I looked into it, the more I realized that it’s actually the Wayne County Land Bank that’s been taking an active role in finding seemingly whatever reason it can — whether or not they’re valid reasons under the agreement or not — to come to the determination that almost nobody is an eligible occupant," McGuire said, noting the quasi-governmental entity was making it "intentionally burdensome" for people to prove their eligibility by requesting excessive documentation of occupancy — and therefore eligibility — like rent receipts and utility bills.

"None of these documents are required to be provided by the occupants under the terms of the program in either the Track A or Track B purchase agreements. The only thing that is required is that the investor makes a determination that the occupants are eligible or not eligible," said McGuire, noting that this could be done in several ways.

In the Brooks case, the owner — Charemon — said her sons lived there and had permission to live there.

"Obviously, that should have been the end of it. Because under that alone, they're eligible under the program for a purchase offer," said McGuire. "It’s not surprising to see how few people so far have successfully initiated a re-purchase of the home that they lived in."

Proving a relationship to a house

Seven miles northwest of 1161 Seward is 18944 Roselawn, an attractive two-story stone house on a hushed street near Seven Mile and Livernois. It was purchased in 1971 by Marzet Slade for $18,750. It’s where Lorenzo Slade, her grandson, has lived for 44 of his 45 years on this planet.

Show caption Hide caption Lorenzo Slade has lived here at his grandmother's home in Detroit for over 40 years, but recently lost his house to tax foreclosure this year... Lorenzo Slade has lived here at his grandmother's home in Detroit for over 40 years, but recently lost his house to tax foreclosure this year over a debt of just over $3,000. The house was photographed on Thursday, Feb. 21, 2019. FPJ Investment, who bought the house from the Wayne County Land Bank, says Slade is ineligible to buy his house back, through the "Action before Auction" program, because he was late in paying his DTE bill. Kimberly P. Mitchell, Detroit Free Press

When Marzet passed away in 2007, Slade took over the responsibilities and upkeep of the house. His connection to the home, and the community around it, is why he says the last few months have been the most vexing.

Like Brooks' house, Slade’s home was scooped up for the Action Before Auction program, and bought by FPJ Investments. Unlike Brooks' house, Slade’s home was inexplicably slotted into Track B. The track with the tougher eligibility guidelines.

Under Track B, an "Eligible Occupant" can fit under two categories.

First they can be an "Eligible Prior Owner," which means the person, or family member, owned the property prior to foreclosure; electric utilities were paid on the property for 6-plus months before foreclosure; the property doesn’t carry mortgage over $5,000 — or if it does, the developer can charge the occupant what would have been the remainder of the mortgage debt.

Second, they can be an “Eligible Renter,” which is defined as any person living on the property who paid rent for 6-plus months prior to foreclosure under a lease agreement.

Under both categories, the Wayne County Land Bank states that there can be no evidence of intentional fraud tied to the property.

When Slade heard his house had been selected for the program, it was August. And, like Brooks he was at the Wayne County Treasurer's Office, trying to fix up an issue with his payment.

While Slade was confused as to why he couldn’t just redeem the property, as he had in other years, he remained optimistic when he was told about the Action Before Auction program.

The feeling was short-lived.

“First it was, ‘We want to make sure this is your primary residence.’ And then it went to a whole different ball game,” he said on a snowy Saturday morning last month.

"They kept saying, 'we just want to know this is your primary residence and not an investment property,' " he continued, explaining he understood that, but after he provided what he believed to be ample documentation, the magnitude of the requests seemed to grow. "You all are just looking for straws, you’re just looking for anything that you can find."

During this time, Slade was in communication with both Palepu of the Wayne County Land Bank, and Budziak of FPJ Investments.

In emails reviewed by the Detroit Free Press, Palepu requested that Slade send over DTE bills, as is required under Track B.

In a series of emails sent in October and November, Slade sent over various receipts ranging from October 2017 to August 2018. In his emails, he explained that the utility bill had never been taken out of his grandmother’s name, so he forwarded along some receipts as well. He also gave a water bill, which was in his name, to further prove his occupancy.

"Remember as I told you this account has never been switched over and waiting on the bill to send that over to you as well showing that it's current," Slade wrote to Palepu on Oct. 26, forwarding along an October 2018 email receipt from DTE thanking the customer for a payment of $510.

"Again paying my taxes is no issue whatsoever I just thought I had until August to pay them to bring them out of foreclosure as I did last year," he continued in the email. "I was keeping up with oldest daughter's college tuition of 1500.00 a month."

On Nov. 21, Palepu wrote Slade, saying she did not have the "required utility bill documentation" and that she needed proof for April-July 2018.

Slade contends that he had been late on the bills during those months but that he had paid them off now.

Detroiter asks developer, FPJ Investments, how he can get his house back Lorenzo Slade plays a recording of a Dec. 3 conversation with Jim Budziak, FPJ Investments owner, who bought his house via Action Before Auction. Detroit Free Press

In an email to the Free Press, Rosenbaum wrote that Slade was not an "eligible occupant" because he "did not provide documentation showing that he paid utilities on the property during the period required for eligibility" and that he "did not provide documentation demonstrating his connection to the property, as required for eligibility."

"I can also say that we were disappointed with this outcome. However, the Land Bank’s authority is limited by its contractual agreements, and we simply, ultimately, could not find Mr. Slade eligible. While we are still hopeful that the participant will work with Mr. Slade, at the very least, Mr. Slade has still received a better outcome than the auction alternative: the program protected any residency he held on the property until a certification of ineligibility was issued, meaning that the participant had to let Mr. Slade live on the property, rent-free and with no eviction threat, during that time,” Rosenbaum wrote. "Auction purchasers, conversely, are able to file eviction actions as soon as they take title, and they can ask the court to order the resident to pay rent and/or place funds into an escrow."

In January, Slade received an eviction notice from FPJ Investments. He shakes his head slowly recounting the experience.

"So you foreclose on my property for $3,300 to give it to FPJ Investments? Maybe I’m crazy but if you’re for the county, doesn’t a prime property in this area — a house with a value of $150,000 — wouldn’t that be a house that you’d want to go to auction? Why would you want to give it to a developer?"

As Slade spoke, his daughter rushed thru the door and hurried up the stairs. His aunt — his grandmother’s sister — gave a quick nod as she later headed outside. The interactions, casual, and comfortable, are what make all the clinical demands for paperwork — and then denial of ultimate eligibility — all the more painful.

Just spending time in the cozy living room — big vibrant plants and family pictures on the mantle — it's clear this is an occupied home.

Show caption Hide caption The living room of Lorenzo Slade's home on Roselawn street in Detroit, Thursday, Feb. 21, 2019. Slade has lived here at his grandmother's home for... The living room of Lorenzo Slade's home on Roselawn street in Detroit, Thursday, Feb. 21, 2019. Slade has lived here at his grandmother's home for over 40 years, but recently lost his house to tax foreclosure this year over a debt of just over $3,000. FPJ Investment, who bought the house from the Wayne County Land Bank, says Slade is ineligible to buy his house back, through the "Action before Auction" program, because he was late in paying his DTE bill. Kimberly P. Mitchell, Detroit Free Press

"How do I not have an interest and ownership in this house when this has been my primary residence?" Slade asked, exasperated, pointing around the room at all that was tangibly his but also referring to the basic reality of how he had kept up the house, both physically and financially, over the years.

Looking at the property's tax history, almost every year since Slade’s grandmother passed away, it had gotten a judgment of foreclosure, and almost every year, Slade swooped in, paid and got a redemption. It’s what he was anticipating happening this year, just as it always had.

"Before these clowns came on the scene, you could buy your house back before the auction as long as you paid what you owed in taxes," he said, before pointing to all new fangled rules and obligations the Wayne County Land Bank has created — rules that effectively barred struggling citizens from reclaiming their homes.

"How are you all creating rules that the tax auction doesn’t even have?" he questioned. "Your whole concern should be: Are these the primary homeowners? All that other nonsense? They don’t ask you before they accept your cash for your property taxes, ‘Hey, are you in good standing with your utility bill?’ They don’t ask you those questions. They take your cash."

Waiting till the last minute

FPJ Investments is not the only "participant" whose eligibility assessments have raised issues for occupants.

On Aug. 31, days before the Wayne County Tax Auction was set to begin, Khalifa McZeal made her way to the Wayne County Treasurer’s Office. The 48-year-old knew her house, a brick bungalow on East Outer Drive, was slated for foreclosure. She had the nearly $4,500 she needed to pay off the 2015 delinquent taxes that was supposed to land the property in the September auction. She believed, from previous experiences and working with others in similar situations, that redeeming a property in August was a thing that could be done.

"For me to get here today is a lot my fault," McZeal said on a bitter afternoon last month. "I got caught up in the ‘I can pay at the last minute' because that’s what they were doing here. So many people were able to go down to the auction and pay for their taxes before the auction. They were taking it, they were taking the money. I was there the 31st, the last day because that's my mindset, that’s my trigger date, that’s it for you, pay this off today."

But on that sticky August morning, when she arrived at 500 Monroe, with her money in hand, she learned this year would be different.

Her house wasn’t going to auction. But it also wasn't getting redeemed. It was slated for the Wayne County Land Bank's Action Before Auction program. McZeal was given Palepu's number, and after what she describes as a brief phone call, she said she was given the number for Southwest Housing Solutions, the local non profit that purchased her home for about $10,000 — the total back taxes, plus an admin fee.

Khalifa McZeal's house in Detroit, Friday, Feb. 22, 2019. Junfu Han, Detroit Free Press

While McZeal said she reached out to the west-side organization, she says she was told they'd have to call her back later. She contends she never heard back.

Her interactions — and ultimate denial of eligibility — were based on emails and phone conversations with Palepu and Rosenbaum, and centered on a September notice she received from the land bank.

That month, the Wayne County Land Bank posted a notice on her door. It reiterated that the house had been pulled by the county to prevent speculators from buying it at auction, but that under the program the new owner was required to give all "Eligible Occupants" the "opportunity to remain on the property as a successful owner or renter."

The letter explained that she "may" be an eligible occupant if she was residing on the property as of August 2018 and either owned, rented or leased the property before foreclosure (i.e. was legally allowed to be on the property), or was a close family member of the prior owner and on the property at the time of foreclosure.

"You may be required to provide documentation regarding rental payments and payments for electric utilities," the letter continued, noting that if she believed she was an "Eligible Occupant" she should promptly contact the new owner (Southwest Housing Solutions) or the Wayne County Land Bank by Dec. 3. If she did not contact them by then, the note explained, she could be evicted.

On Dec. 3 — the deadline for reaching out, according to the letter she received — McZeal sent an email to Palepu saying she was interested in staying in her house.

What followed were a series of emails where McZeal and Palepu debated whether or not they had spoken in August (Palepu denied it, saying she would have documented the conversation), whether or not Southwest Housing Solutions contacted McZeal (the non profit had told the land bank it had), the program's tracks (McZeal had done research into the program and couldn't understand why her home — an occupied home — was in Track B), and finally, eligibility.

In response to Palepu's request for documents proving a legal connection to the property, proof of primary residence — such as a driver’s license — and proof of utility payments from January 2018 to July 2018, McZeal did her best to explain the various barriers that made access to such documents difficult — why for some, the answers wouldn’t be as clear-cut, as perhaps they would be for a person who wasn’t struggling with poverty.

She explained that, in regards to the DTE bills, she had been struggling and out of work during the time period requested but had a relative help pay the utilities during that period. Her driver’s license had expired and was put on hold because of outstanding parking tickets, but her voter registration was connected to the address in question.

Palepu responded later that day, explaining that she had not received documents necessary to determine eligibility and that she would need them by 4 p.m. that afternoon — 2 hours and 15 minutes from then — as it was already past the Dec. 3 "deadline."

Emails — and phone calls — continued between the two over the course of the next day, where they debated whether or not they had spoken, whether or not McZeal had made efforts to contact the Wayne County Land Bank and Southwest Housing Solutions, and finally over whether the documents provided proved eligibility.

On Dec.10 Rosenbaum sent McZeal an email saying she was ineligible for the program because she failed to provide the necessary eligibility documents by the “specified deadline.”

McGuire, who is representing McZeal as well, points out that the letter, and the Action Before Auction guideline, never said the documents had to be turned in by Dec. 3. It simply said occupants must express interest by then.

Rosenbaum ended his rejection email with an ominous addition. "Please also be aware that the Land Bank understands the you may have committed fraudulent and/or illegal acts on this property in 2014 when it was purchased from the Wayne County Treasurer,” he wrote, adding that the "these acts" would "further disqualify" her from eligibility, but that they could also subject her to “criminal perjury charges."

McZeal said she had no clue what Rosenbaum was talking about, but the email stopped her in her tracks. It scared her.

Homeowner speaks to county commissioners about home being taken by Action Before Auction Khalifa McZeal addresses Wayne County Commissioners on Feb. 21, 2019 about troubles getting her home after it was pulled for Action Before Auction. Detroit Free Press

But then on Jan. 16, McZeal received a notice to quit from Southwest Housing Solutions Corp. She was told she had until Feb. 17 to move, or the landlord could take her to court and evict her.

She linked up with McGuire and UCHC. She was reminded that she had to keep fighting. She went back to the Wayne County Treasurer's Office. She was able to speak with Eric Sabree.

Getting in front of the right audience seemed to work. On Feb 20, Sabree, who is the Board Chairman of the Wayne County Land Bank (a requirement in the organization's bylaws), called an emergency meeting to discuss McZeal's home.

At the County Commissioners meeting the next day, where McZeal shared her story, Rosenbaum told the Free Press that she would likely be able to keep her home.

The news was bittersweet for McZeal. She could stay. But what about the others?

"How many people didn't know they had options?" she asked. "Or just heard 'I got your house, it’s over, here's your notice to evict'?"

Southwest officials dispute McZeal's characterization of her case and said they are bound by strict program requirements in terms of options in dealing with former occupants. “Southwest Solutions remains deeply committed to its mission of preserving and promoting affordable home ownership and housing and helping to stabilize neighborhoods," Project Manager Shelley Bancroft said in a written statement.

Playing favorites

While occupants are getting shuffled around, questions remain about favoritism and who is benefiting here.

“The favoritism angle does come into play when, naturally, one wants to find out the motive for selling these properties to developers for very reduced prices,” said McGuire, explaining that, eventually, when one comes to the conclusion that the program is not about preserving home ownership or stopping occupants from being displaced, the reasons for pulling occupied properties for the program narrows.

“What you’re left with?" he asked rhetorically, "the idea that they’re favoriting some developers and giving them better deals than the auction.”

Despite the strict adherence to “policies” and “rules” for occupants — unless they're able to get in front of the right leaders — there is flexibility for developers.

Team Cares, for example, whose board members include former county commissioner Phil Cavanagh, purchased four properties on Detroit’s east side in 2017. While two had been occupied at the time of purchase, according to a survey by the county treasurer's office, when the Free Press visited last month, all four were blighted and empty, missing the March 1 extension they were already given.

Compounding the situation is the fact that, in August, while they still hadn't completed rehab work on their distressed east-side homes, Team Cares was permitted to buy 11 new properties for the second year of the program.

Show caption Hide caption Four properties on Lakeview Street in Detroit on February 20, 2019. The houses were purchased by Team Cares from the Wayne County Land Bank during... Four properties on Lakeview Street in Detroit on February 20, 2019. The houses were purchased by Team Cares from the Wayne County Land Bank during the 2017 pilot year of what would become the Action Before Auction program. The homes were purchased by Team Cares in a bundle for $28,998. Two had been occupied at the time of the purchase; they are all now empty and in various states of disrepair. Allie Gross

Additionally, multiple developers were approved for year two of the program, despite being delinquent on property taxes for parcels they purchased in year one.

FPJ Investments was delinquent on one of its Dearborn Heights properties, owing a total of $7,378. Realty Transitions, which is currently ensnared in a federal probe of Taylor’s RoR program, was delinquent on one of its Canton properties, owing $3,357. Citi Assets, which purchased nine properties during the 2017 program, was delinquent on eight of them, owing a total of $24,002. While Citi did not apply to be in the program for year two, its director, Will Arabi, also runs Progressive Real Estate, which was selected for year two.

When the Wayne County Land Bank was asked why it did not verify whether or not participants were in good standing with their taxes when reviewing their applications, the Land Bank explained that “delinquency status remained in flux” when the review was happening in March and April.

“Legally, properties are only returned to the Treasurer as tax-delinquent in March, and practically, the Treasurer’s Office is continuously processing/updating status between March 1 and the foreclosure redemption deadline,” the Wayne County Land Bank responded, highlighting, in the process, some of the flaws and inconsistencies of the auction.

While state law says properties with delinquent taxes are supposed to be foreclosed upon on March 31 — with a 21-day redemption period following the judgment of foreclosure — in recent years, Treasurer Sabree has pushed the judgment to June 6 and 7, specifically for homeowners who fall off their payment plans, according to Oberholtzer, of United Community Housing Coalition.

“It’s never widely publicized and there are weird vagaries but that’s basically it,” she said, explaining that, additionally, in some cases, people have been able to get on payment plans or pay off their taxes and have their homes pulled from the auction as late as August.

The “practicality” that the Wayne County Land Bank referred to in regards to the developers, is exactly what critics of the program note could have helped occupants, who also would have enjoyed more time to redeem their properties.

“When you have the kind of system that’s dysfunctional,” Hammer said, referring to the yearly auction, “it invites all sorts of opportunistic behavior and abuse. We’ve seen what’s happened with Eric Sabree, where people who are involved with it start to manipulate it. And now you have this big question mark of a program that seems to be directed in a positive way but is not only incoherent and not serving the people it’s supposed to be serving, but it’s likely also to be a ripe area of self-dealing amongst other people in the county.”

Detroit resident has property taken by Wayne County Land Bank Freddie Alexander, of Detroit, says Wayne County Lank Bank stole his property and never allowed him to purchase it back. Kimberly P. Mitchell, Detroit Free Press

As the county's own analysis from the summer noted, the county ultimately loses money with Action Before Auction.

"The Program allows developers and non profits to purchase properties at the minimum bid amount, make minimal improvements and sell at a high profit," the analysis stated, noting that the properties developers were choosing were the ones with the "best resale values" that would "likely sell for amounts greater than the minimum bid amount at the Treasurer's foreclosure auction."

"As a result of the Program, the Treasurer retains the truly blighted properties which need the most rehabilitation and require demolition without the potential revenue from the valuable properties to offset maintenance costs," the analysis stated, finally adding that the program didn't seem to reduce the number of blighted properties in the Treasurer's inventory, as it promised.

For critics, this is the ultimate gut-punch. Not only is the program not keeping people in their homes, but it is also not financially worthwhile. And while the auction has now been widely accepted as a failed form of public policy, programs like Action Before Auction can exist, produce the same results as the auction, but do so with little scrutiny.

"One of the things we know about payment plans, a lot of those payment plans are failing, it strings people along, so we know we are delaying those foreclosures and a lot of those are likely to happen down the road. This is another channel and we don’t know how extensive it is," said Joshua Akers, an assistant professor of geography and urban and regional studies at the University of Michigan-Dearborn. "We lose track of what people are doing, if people are being evicted from their homes, or if people are losing their homes to foreclosure, because it is pulled out of the auction and it happens in another arena that is not included in that annual number that the city and the county are keen to promote."

Back on Seward

Back on Seward, Brooks and her family are trying to figure out what to do next. Do they move on or do they dig their heels in, fight for their place in the county.

"I’ve been feeling upset because I am somewhat of an activist in the community, so I know about gentrification and stuff like that that’s been going on and I feel kind of blindsided, like ‘Oh, it’s happening to me. Like, OK, cool!’ I don’t know it kind of took me off guard," said Jalin, his records and guitars scattered around the room, all the things he'd have to pack up and move. "This house has just been a thing all my life, I just didn’t think this house was not going to be a thing at some point in my life, so finding that out now, it’s like, ‘All right. I got to restart everything?’ It’s like a hard reset."

Show caption Hide caption Charemon Brooks checks the mail in the hallway of her family home on Tuesday, Feb. 12, 2019 in Detroit. Her home went into foreclosure and... Charemon Brooks checks the mail in the hallway of her family home on Tuesday, Feb. 12, 2019 in Detroit. Her home went into foreclosure and before she could buy it back, the house was sold to a developer. Brooks' two sons now live in the house and are unsure of their future. Elaine Cromie

Brooks sat quietly, curled up on the couch as her son spoke. Ever so often, she'd nod along.

When the mom talks about the trajectory of 1161 Seward, she is matter-of-fact. It’s only when she talks about house's legacy that her demeanor softens.

In 1990, right after she and her husband had Jaloni, Brooks would drive around the city of Detroit looking for apartments. Their landlord had just raised the rent. They wanted a place that was affordable and clean. A place that their new little family could start a life. Everything, however, looked like a dump, according to Brooks.

She was depressed and anxious. But then her dad’s cousin, Lewis Sands, stepped in.

“Tell Baby Girl she can move in here,” she remembers Sands, a former Detroit Police officer, telling her father.

Rent would be $300. She could get settled. Years later, as Brooks and her husband became more financially secure, they inquired about purchasing the four-unit duplex for themselves. In 1996, they did, for $70,000.

As the family grew, they ended up moving. First, to a bigger house in Rosedale Park, and later, to Novi, so their kids — four by this point — could attend a better school. Eventually, Brooks came back to Detroit to her current house in Brightmoor. Through it all, however, the house on Seward remained a constant. It was a spot where family, when in a tough spot like she had been in the '90s, always knew they could crash.

“In my mind,” said Brooks, “there was never a thought in my mind that this would not be in my family.”

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Contact Allie Gross: AEGross@freepress.com. Follow her on Twitter @Allie_Elisabeth.