Imagine finding a house, not a dream house by any means, but something you could call yours. Imagine signing what you believe are the appropriate documents along with who you assume are the home's rightful owner or management company and being handed the keys. Imagine working your ass off to repair the home's electrical and plumbing, all while making on-time payments each month only to find, once the home has been paid off, that it never belonged to you and the payments were never going toward the purchase of the home.
Imagine being scammed and having lawyers and courts tell you there's nothing that can be done. Imagine being told the money — and the dream — are gone.
According to a four-month investigation published by NBC News and Outlier Media, this situation is not uncommon in Detroit. In fact, it's estimated by lawyers and housing advocates that fake landlord scams, which have plagued the city for nearly a decade, affect 1 in 10 Detroit tenants facing eviction. And experts say Detroit is the ideal breeding ground for this to happen.
For one, you've got tens of thousands of vacant houses — or, as has been the case since it was advertised that you could buy a home in Detroit for $1, homes owned by out-of-town investors who have little to do with the management of the home, let alone who may or may not be legally occupying it.
Meanwhile, residents remain vulnerable to predatory transactions due to a lack of resources and, well, lack of money. In 2019, for the first time since 2010, Detroit slipped from being the No. 1 most impoverished big city in the U.S. to No. 2, with 30.6% of residents living below the poverty line. There is no doubt a correlation between the 2008 housing crisis which resulted in more than 65,000 Detroit residents losing their homes and the scam culture that is ruining lives today. Not to mention the fact that, following the mortgage crisis, the city seized one-third of Detroit properties due to tax delinquency, sometimes taking homes from people that owed as little as $1,000.
So, how does the fake landlord scam work?
Unfortunately, it is seemingly simple.
In those cases involving foreclosed homes, of which there are many, people who have had their homes foreclosed on will keep collecting rent from tenants, not alerting them that they are no longer their landlord. And then there are people who simply break into a vacant house, pay to have the locks changed, list the home, and collect rent or mortgage payments from the unsuspecting buyers, going as far as to falsify deeds and documents, making it difficult for victims to discern scam from reality.
"People have gotten away with this stuff for years and years and years, and they do it because there’s no penalty for it," Ted Phillips, a veteran Detroit housing lawyer, told NBC News. Phillips also said he has been told by prosecutors that there is often not enough evidence in cases involving the fake landlord scam to hold anyone accountable.
Even the Wayne County Prosecutors' Office admits that they haven't seen any scam-based cases recently, but those cases that do reach prosecutors are usually those where forged or fake deeds have been filed with the county. Of the 122 complaints the county's deed fraud unit investigated in 2019, only 14 ended with scammers being convicted.
Then there's Detroit's Land Bank Authority, which "owns over 64,000 lots and 13,000 houses, making it the city's largest property owner." The Land Bank is responsible for managing vacant properties to eventually get them to a state where they can be safely sold and inhabited. However, many allege that the Land Bank is not keeping up with those promises, nor are they making contact with those who live in nearly 2,400 occupied Land Bank-owned properties, making it easier for predators to take advantage upon hopeful future homeowners.
"We are certainly limited by size, scope, and budget,” Alyssa Strickland, a spokeswoman told NBC News and Outlier Media. She also added that the Land Bank is "working diligently every day to connect with people living in Land Bank-owned houses."
Then there's the Land Bank's Buy Back program. The Buy Back program is basically a pipeline for people who are residing in Land Bank-owned homes to become homeowners through a series of steps, requirements, and proof that they are, in fact, tied to the home in some way like the many applicants who may have previously owned or rented a home and continued living in it after it had been foreclosed. Program manager Alysse Miller says she believes 1 in 5 people who call to inquire about the program are victims of scams.
The Buy Back program, however, cannot recoup money lost to scams and fake landlords and the program can do nothing to help those who have been scammed when dealing with non-Land Bank-owned homes.
We are well aware of the problem, but how do we make it stop?
Advocates and experts say that the city needs to provide the necessary funds and resources to nonprofits, churches, and other community hubs so they can offer housing advice before embarking on what has become a dangerous and all too common scenario, which continues to impoverish hard-working Detroiters. Others say there needs to be access to legal counsel for those facing eviction, which, in the coming months following the end of the federal eviction moratorium, could mean thousands of Detroiters could find themselves vulnerable to scammers.
Others, like Anika Goss of Detroit Future City, say it's a all-hands on deck housing emergency.
"We need a statewide systems change to be able to stabilize housing in Detroit and we need everyone working together on this," Goss said.