From Atty. Bob Day; Paramount Homeowners
Oct. 24, 2012
DETROIT— Homeowners swindled by Paramount Land Holdings in a scheme financed by the Detroit Police and Fire Pension Board face a court hearing Friday morning, Oct. 26, which could lead to their eviction. The Paramount homeowners and their supporters will appear in court in front of Judge John Gillis to counter the Police and Fire Pension Board’s claim that they “may not exist at all,” and to testify to the fraudulent practices funded by the Pension Board.
In 2009, the Detroit Police and Fire Pension Board loaned $10 million to Paramount Land Holdings of South Carolina to buy foreclosed homes for as little as $10 and sell them by land contract to area residents for tens of thousands of dollars. Paramount claimed to have paid all back taxes.
It was a swindle from the start. Paramount never recorded its interest in the properties and taxes were never paid. Paramount took down-payments and monthly charges from buyers, but the land contracts did not include legal descriptions of the properties, so buyers could not record their land contracts. Paramount did nothing to repair the homes, so buyers had to pay to make the homes habitable.
The whole scheme began to collapse when the Wayne County Treasurer began tax foreclosure proceedings against the homeowners for the back-taxes Paramount had not paid. The Pension Board finally sued Paramount, which is now bankrupt. One of the Paramount principals committed suicide and the other [George Kastenes] has been arrested in Florida.
Paramount homeowners have been organizing and opposing the tax foreclosures and evictions. The Wayne County Treasurer agreed to a temporary stay on foreclosure proceedings, but the Pension Board insists that homeowners should continue to pay under the illegal land contracts and is threatening to evict those who refuse. At this Friday’s hearing, the Pension Board will seek exclusive title to these homes, punishing the victims of Paramount’s fraudulent practices.
The Pension Board made a deal with crooks who profited from the foreclosure crisis. Paramount home owners are fighting back with assistance from the United Community Housing Coalition and Legal Aid and Defender, demanding that the Pension Board negotiate a settlement that will transfer legal title to the buyers who are living in the homes, improving the properties, and helping to stabilize Detroit’s neighborhoods.
Comments by Bob Day, from earlier VOD article on rally vs. banks, June 12, 2011:
“Bob Day said that not only have the banks robbed people nationwide by foreclosing on them, they are coming back for a second round. Companies like Paramount Land Holdings, Inc., the Rice-Peters Financial Corporation, Destiny Ventures and others are buying thousands of foreclosed Detroit homes in bundled packages for $1 each from Deutsche Bank, Bank of America, and others who evicted the original owners.
Those banks already made huge profits because the full sums of their mortgages were guaranteed by Fannie Mae and Freddie Mac, in addition to money they got from insurance against vandalism, and the trillions in bail-out tax dollars from the U.S. government.
“One of my clients bought a $1 home for $45,000, put $750 down, and made her monthly payments,” he explained. “But when her furnace went out and she tried to get state aid to fix it, she did not show up as the owner of record because Paramount had not put the legal description of her property in the land contract, so she couldn’t register it. Then she got a notice of property tax foreclosure because Paramount hadn’t paid taxes on the home. Another client got hit with an outstanding $13,000 water bill.”
Day advocated mobilizing the people in the thousands to seize homes foreclosed by the banks as well as by city and county governments. He said they should be given to those who need them to fix them up and put them back on the property tax rolls, to rebuild the city.”
For more information, contact Bob Day, Legal Aid and Defender Association, 313-971-8170 Paramount Homeowners: Dana Hill, 313-412-4478; Steve Bynum 313-915-8604; Deon Coleman, 313-626-8010