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3 families get temporary eviction reprieve, as foreclosure "fraud" suit moves ahead

Joe Gratz
Flickr - http://j.mp/1SPGCl0

A federal judge has given some Wayne County homeowners suing over alleged illegal foreclosures a partial, early victory.

U.S. District Court Judge Judith Levy granted a temporary restraining owner protecting three families from eviction at least through mid-January.

The families are part of a larger federal lawsuit that alleges officials from Wayne County and several Detroit suburbs illegally “conspired” to seize their homes through tax foreclosure, and sell them off to private developers.

The plaintiffs say officials in the Wayne County Treasurer’s office deliberately “deceived” them, telling the homeowners they had more time to make delinquent tax payments and avoid foreclosure.

In reality, the cities had exercised their right under Michigan tax law to reclaim the properties from the county. The cities then sold the properties to a handful of developers.

Tarek Baydoun, an attorney for the plaintiffs, says officials never notified the homeowners about that – and later fabricated evidence to say they had.

“There are 18 families that have signed affidavits to that effect. This cannot be an anomaly,” Baydoun said. “We’re going to discover the fraud that has happened here.”

Their actions amount to an “illegal and uncompensated taking of property … for purely private purposes” in violation of the U.S. Constitution, and also violated the homeowners’ due process rights, Baydoun says.

In an emergency hearing via conference call Wednesday, lawyers for the various defendants said the case has “no merit.”

“County defendants strongly contest the allegations in this complaint,” said Cynthia Yun, a Wayne County lawyer. “The intention was to comply with all due-process requirements.”

Tony Taweel, a lawyer for defendant JSR Funding, said the plaintiffs waived their right to challenge the foreclosure process when they entered into payment plans with the county.

Taweel also argued that it’s “too late” for a legal challenge. “None of the plaintiffs are titleholders,” he said.

Defense attorneys also argued that federal courts have no jurisdiction over the case, but Judge Levy appeared to disagree.

The plaintiffs have alleged “very disturbing facts” that, if true, “raise federal court issues,” Levy said. “The public has a very serious interest in ensuring these [tax foreclosure] processes are being conducted by the Constitution.”

Levy granted Baydoun’s request for a temporary restraining order against eviction for three of the families who haven’t formally been evicted. But she declined to issue protections for the remaining plaintiffs, saying the law prevents her from stopping evictions already in progress.

Another hearing in the case is scheduled for Jan. 13.

Sarah Cwiek joined Michigan Radio 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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