Critics say the Land Bank — which owns over 64,000 empty lots and 13,000 houses, making it the city’s largest property owner — bears some of the blame for the pervasiveness of the fake landlord scam for failing to keep tabs on its properties.
The authority acknowledges that it isn’t always able to make contact with people living in the estimated 2,400 occupied houses it owns, allowing scammers to break into the houses, then credibly pose as landlords.
“We are certainly limited by size, scope and budget,” Alyssa Strickland, a spokeswoman, said, adding that the authority is “working diligently every day to connect with people living in Land Bank-owned houses.”
The Land Bank created a one-person Real Property Integrity Unit early last year to investigate reported scams and has since referred 10 cases to police, Strickland said.
Some of those cases are now part of a deed fraud investigation that the police are pursuing, department officials say.
“We’re doing everything we can to hold these individuals accountable,” said police Capt. Gerry Johnson Jr., adding that the department is aware of the prevalence of the scam but says these cases are “very complex” and often involve people using fake names and IDs.
Mayor Mike Duggan’s office referred questions to Lawrence Garcia, the city’s top lawyer, who said he’d “tripped across” anecdotal examples of the scam when he was in private practice but hadn’t put much thought into the problem since joining the administration in 2018. He suggested some city housing initiatives announced this year could help, including a program — funded with Covid relief dollars — to make lawyers available to tenants facing eviction.
“There’s no way that the landlord is going to be in compliance with the rental registration ordinance if they don’t even own the land,” he said.
As for police, it’s not clear how often they even hear about scams. Of the eight victims interviewed by NBC News and Outlier, only one contacted authorities. Others said they feared retaliation from their scammers.
Poydras, the renter who said he lost two puppies, said he didn’t call the police because he doesn’t trust them.
McCarty, from Michigan Legal Services, said many of his clients are too focused on finding new housing to file a report. He said he’s never notified the police either, since scammers seem to disappear behind fake names and disconnected numbers.
“We’ve all become resigned to the fact that this happens all the time,” McCarty said.
“We kind of say to clients, ‘Look, you got screwed. Let’s move on. We can help place you in housing, help you negotiate something with the current owner, but there’s no way you’re getting that money back.’”
When police do get involved, it’s usually because they’ve gotten a call from a homeowner complaining about squatters in their house, but that often doesn’t end well for the tenants, said Phillips, the lawyer who also leads United Community Housing Coalition, a housing assistance organization.
“Often, the police response will be ‘You gotta get out’ and everything is lost,” Phillips said, adding that many scam victims never even get a chance to plead their case in court because police push them out, seeing them as squatters, rather than tenants entitled to the legal protections of the eviction process.
“That’s devastating,” Phillips said. “Just imagine everything you own being on the curb or in a big dumpster.”
Police department guidelines call on officers to refer these cases to the courts rather than remove people from their homes, Johnson said.
When Derrick and Maurice disappeared in April, Walker began to get worried.
She knew something wasn’t right.
Then, in June, she opened her mail and found a summons accusing her of trespassing and ordering her to appear in housing court. She checked the envelope to make sure it had her name on it.
“It had to be a mistake,” she said. “I had purchased the house. I had every receipt. I had the lease. You know, I’m 65 and you send people stuff like that they’re liable to have a heart attack.”
It wasn’t until she appeared at her virtual court date in July and connected with a lawyer that she learned she may have been the victim of a scam.
The lawyer assigned to her through the city program for tenants facing eviction informed her that the owner of her house was not a man named Derrick.
When Walker moved into her bungalow in 2019, records show the owner was a Pennsylvania company called RHMS Group, which bought the house in a 2017 county tax auction for $8,500.
RHMS, which owns nearly 70 properties around Detroit, sold the house on June 2 to a Florida company called Boccafe LLC for $25,000.
Three weeks later, court records show, Boccafe filed eviction papers.
The company had no idea Walker had been making payments on the house, said attorney Randy LeVasseur, whose firm represents both Boccafe and RHMS.
Walker was baffled by the timing of the sale, which occurred after she spent two years improving the house and paying off the contract.
“I’ve been here, openly,” she said. “How did they not even drive down the street and look at the house anytime in three years? It was just, ‘This is Detroit and we don’t care. We got this house and we’re going to let it sit there vacant, all messed up, destroying other people’s property values.’”
Martin Szumanski, the president of RHMS, said he believed his house was vacant from 2018 until he sold it in June.
Szumanski, who lives in California, said he’d spent $15,000 renovating the property in 2018 but declined to produce records of that work. When told of the condition Walker said she found the house in 2019, Szumanski said he had been scammed by a contractor who billed him for renovation work that was never completed. (The contractor denied this, saying he and Szumanski had disagreed about construction costs.)
Szumanski said he travels to Detroit several times a year to keep tabs on the company’s houses, though he’s not certain whether he visited Walker’s house.
“Detroit is remarkably shady,” Szumanski said. “The reason this is happening in Detroit is because there’s an unfortunately naive population there who doesn’t know their rights and they don’t know how to research things or look into things and there’s shady people who are trying to take advantage of that.”
Walker’s July court hearing was brief, she said.
When she told the judge she believed she was the home’s owner, the judge told her to talk with her attorney and postponed a decision on eviction.
‘Some kind of safety net’
The housing scam happens so often that Alysse Miller, the Land Bank’s program manager for occupied houses, estimates that 1 in 5 people who call about the authority’s Buy Back program are residents who’d been paying the wrong person to buy or rent their home.
The Buy Back program, which Miller runs, allows residents of Land Bank houses to become homeowners if they can prove a legitimate tie to that house and meet other requirements, such as attending homeownership classes and making a $1,000 down payment.
Many applicants are former owners or tenants who remained in a house after a foreclosure.
But a sizable number, Miller said, are people who were scammed.
Among scam victims the Land Bank has helped is a mother of four who, in 2018, gave $800 to a man who said he could sell her a duplex on Detroit’s west side.
The victim told the Land Bank that she drove with the man to four places: The library, where he printed out a blank deed transfer form; her bank, where the pair signed the form and had it notarized; the Wayne County Register of Deeds, where they filed the form; and the tax assessor’s office, where they listed the victim as the taxpayer.
The “quit claim deed” the pair registered that day is still on file with the county. The document was properly notarized.
But, legally, it was meaningless. The house had fallen into foreclosure in 2012 and had been owned by the Land Bank since 2014, records show.
While most victims never recover the money they lost, Miller said the mother of four was able to take ownership of her house through the Buy Back program.
People scammed in privately owned homes — like Walker — have no such option.
That’s why advocates say Detroit leaders need to take aggressive steps to prevent scams, starting with a thorough review of the city’s housing protections.
“We need a statewide systems change to be able to stabilize housing in Detroit and we need everyone working together on this,” said Anika Goss, who leads Detroit Future City, an economic development think tank.
Jim Schaafsma, a housing attorney with the Michigan Poverty Law Program, called for a robust information campaign to alert people to the scam and to “the value of doing a title search to make sure the person you’re dealing with has the authority to legally conduct this transaction.”
The city needs to arm nonprofits and churches with the tools to provide housing advice to people before they buy or rent, said Lee Anne Adams, the senior vice president for national initiatives with NeighborWorks America, which launched a program last year called StopHomeScams.org.
And Detroiters also need access to legal counsel when facing eviction — even after the Covid relief dollars dry up, Phillips said.
‘Justice has to be done’
The next hearing in Walker’s eviction case is scheduled for Friday.
Phillips, who is part of Walker’s legal team, said that unless Walker can prove a connection between the man she was paying and the property’s former owner, she’s not likely to be able to claim ownership.
Her best option might be to work out a deal to buy or rent the house from the current owner, he said, but it’s not clear if the owner will agree.
LeVasseur, the attorney for Boccafe, filed a motion on Oct. 20 asserting that despite claiming in court last summer that she owns the property, Walker had not shared valid proof of that claim.
Scams like these don’t only affect tenants, LeVasseur said in an interview last month. They also create headaches for property owners stuck with tenants they didn’t choose. In some cases, his homeowner clients work out a deal to allow tenants to stay; other times, he said, “we have to arrange for a move out.”
As Walker prepared for the hearing, she said she wished she’d had a place to turn for help — both when she signed her lease and later, when she had trouble getting the deed put in her name.
“There should be some kind of safety net, step by step, to tell you what to do,” she said. She believes the city should have a fund to help people who are victimized.
She said she wouldn’t even consider the possibility of leaving her home.
“Justice has to be done. Period,” she said. “We’ve got to come up with a remedy for this, and it’s got to be justice.