Buyers of Bank and HUD Foreclosure List Homes Warned Against Errors

  For people interested in buying foreclosed properties in Detroit, Michigan, including those under an HUD foreclosure list, they had better heed the warning of others who have been there and done that. A number of previous owners of properties in the city have reported that they lost their houses to an investor who has a stake in their properties that they were not aware of.

According to local reports, a number of properties ended in Detroit foreclosure listings after owners were foreclosed on by investor Michael G. Kelly who owns a stake in these properties. The problem is several of these former homeowners have stated that they were not even aware that Kelly was part owner of their homes until they received the foreclosure notice.

A number of Michigan foreclosures cases have reportedly been filed in the area by Kelly and his firms in an effort to take control of homes and other properties for which he has purchased interest at tax auctions. Homeowners who have dealt with Kelly reported that they were unaware that the investor had purchased an interest in these houses by paying the delinquent taxes attached to these properties.

These unpaid taxes were mainly incurred by previous owners before they were purchased by the people foreclosed on by Kelly. Majority of them have revealed that they were not aware that a tax lien for their homes exists. Some owners have asserted that vague rules governing titles of previously owned properties, including those from bank and HUD foreclosure list, are partly to blame for the confusion.

A handful of those who have lost their dwellings to list of foreclosed homes for sale after Kelly started a foreclosure action against them have filed lawsuits against the investor, alleging that they were not properly informed that proceedings have already started against them. Meanwhile, other owners have accused the investor of taking advantage of the city regulation which does not require tax liens to be filed in the city.

Some local realtors have weighed in on the issue, stating that rules governing properties under bank and HUD foreclosure list can get confusing. Lawyers for Kelly have also stated that the county has been known to erroneously sell properties at tax auctions and that it is not the buyer's fault.