Apr 302011

Why local group thinks Detroit is at the battle’s center

The Wayne County Board of Commissioners was supposed to hold a public hearing April 27, on Commissioner Martha Scott‘s proposal seeking a moratorium on housing foreclosures in the county.

But that hearing was canceled by Commission Chair Gary Woronchak, raising the ire of the group People Before Banks, according to Steve Babson, a leader of the group that is supporting Scott’s efforts.

Babson, a prominent labor historian, author and activist, says his group wants the county to investigate the legality of foreclosures taking place. In addition to the investigation, People Before Banks wants the commission, as proposed by Scott, to call upon Sheriff Benny Napoleon to institute a moratorium on the sheriff’s sales of foreclosed homes while the matter is being sorted out.

The legality of many foreclosures is being challenged nationwide on a variety of fronts. As the television program 60 Minutes recently reported, there is ample evidence of mortgage holders attempting to foreclose on properties using forged documents because the proper paperwork wasn’t in their possession — often because mortgages were never legally transferred.

In Michigan, the state appeals court recently invalidated foreclosures sought by one of the system’s major players.

The court ruled that the state’s Mortgage Electronic Registration System (MERS) lacked the legal standing to pursue foreclosures by means of “advertisement,” meaning that it only had to post notice that a house was being foreclosed on to proceed. Now MERS, which according to court documents was “developed as a mechanism to provide for the faster and lower cost buying and selling of mortgage debt,” must take a homeowner to court as its first step in a foreclosure process. That gives homeowners the opportunity to demand documented proof that the foreclosure is lawful.

And as a result of that ruling, says activist and attorney Vanessa Fluker, all foreclosures brought by MERS in the state are voided.

Which is why Scott and the group People Before Banks want a moratorium put in place while this snake pit gets sorted out.

Commission Chair Woronchak says his concern about Scott’s proposal is that it lacks “teeth.”

Ultimately, it is up to Sheriff Napoleon to decide whether to conduct sheriff’s sales of foreclosed properties. Former Sheriff Warren Evans briefly implemented such a moratorium during his unsuccessful run to become mayor of Detroit. He backed off the effort after a lender’s lawsuit claimed the sheriff couldn’t legally impose such a moratorium.

Babson contends that, given the prevalence of fraud, a sound case can be made that the sheriff could legally impose a temporary halt to foreclosures.

Woronchak, while voicing support for efforts to help keep people from losing their homes, tells News Hits that there needs to be a more “deliberative” process before the commission decides on its course of action.

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 April 30, 2011  Posted by Moratorium Now!  Add comments
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