BANK WALK AWAYS IN DETROIT

[Bill Gulley]

Detroit is falling and much of the blame is aimed at the banks.

It was just reported that banks started foreclosures and evicted tenant/owners but have not taken posession of the property leaving taxes due from the old owners. They said the city doesn't have funds to do a search for vacant properties with taxes due, a lack of man power. They could work the process backwards and find the lenders responsible and hold them accountable, if they had the people to do the leg work.

I just thought it might be an opportunity for investors. Approach the city and offer to do the leg work, charge a fee and place a lien on the property for the fee, might be able to do so through the city making it a municipal fee. Since you're doing for nothing and waiting for any fee a fee of 2 or 3 K might be inline.

The city is also fighting the appointment of the emergency manager that was appointed, that's another issue.

I'm not familiar with MI foreclosure laws, but it seems strange to be that a foreclosure could get an eviction without the bank taking possession, if anyone knows, please explain!

What opportunities do you see here?

[Rob K.]

I don't think the leins would have any value. There are hundreds of houses that sell at the tax auction for $500. The tax leins wipe out any other leins, including a mortgage. There are homeowners walking away from their free and clear homes. They would rather get nothing than deal with the crime and high taxes.

Even if you approach people at the city level, they will be clueless as to what you are trying to do. They are short staffed as it is. There are thousands of houses waiting to be torn down, but the city has no idea who owns them. It always baffles me that they don't know who the owner is, but I guess it happens.

It's an interesting idea, but the houses have little to no value. There was a problem with landlords not paying their taxes. Rather than come up with $10K for three years of back taxes, they would just go to the tax auctiuon and buy the houses back for $500 and not pay the taxes.

Hopefully an EM will turn the city around or bankruptcy will happen. It can't stay the way it is.