Philadelphia sheriff sales, which have been halted for months, are set to resume next Tuesday – and from now on, they will be held exclusively online.
Philadelphia Sheriff Rochelle Bilal hosted a virtual press conference Monday where she discussed how sheriff sales are set to resume on April 6. The sales, which have been on hold since March of last year due to the coronavirus pandemic, will now be held exclusively online, a model that replaces the practice of hosting in-person sheriff sales. The sheriff’s office selected Silver Spring, Maryland based Bid4Assets to host the city’s new virtual auctions.
Bilal said that the decision to adopt a virtual auction model, which was revealed to the public only several weeks ago, would protect bidders against COVID-19 and modernize the sheriff’s office.
“This transition is taking place because it’s time to bring the Philadelphia Sheriff Office into the 21st century,” Bilal said. “A year without sheriff sales gave us a chance to think outside the box and then we found the ideal partner, after reviewing others, to help us build a whole new box in Bid4Assets.”
In Philadelphia, the sheriff is the elected city official responsible for conducting court-ordered auctions of foreclosed properties to pay off mortgages owed to lenders, as well as any taxes and liens on the property still owed to the city. Proceeds in excess of these costs are transferred to the foreclosed-upon homeowner through the Homeowners Asset Recovery Team, or HART. (The sheriff is also responsible for providing security services to Philadelphia courtrooms.)
Bid4Assets CEO Jesse Loomis described the new bidding process at the press conference. He said new bidders would need to register an account at https://www.bid4assets.com and review local auctions at https://www.bid4assets.com/philadelphia . When bidders want to participate in an auction, they would fund a deposit for any property on a particular sales date, and log on during the auction time to place their bids. Bidders could also set the bidding system so a proxy would bid up to a set amount for them.
Under the new system, Bid4Assets would have a wide range of responsibilities in undertaking the city’s sheriff sales.
“Bid4Assets role would be to manage the entire auction process, from collecting deposits and sales proceeds, to conducting the auctions, collecting vesting or titling information for the deeds, and providing support to the sheriff’s office and live customer service via phone and email to bidders and attorneys who have questions along the way,” Loomis said.
Bid4Assets also handles the auction process for five other counties in Pennsylvania region, according to a sheriff office press release – namely Berks, Bucks, Montgomery, Adams, and Monroe Counties.
Bilal said that the new system would make sheriff sales more accessible to the city’s businesses and residents who were unable to attend in-person auctions.
“As a matter of fact, we have had people who are business owners in this city that actually wanted to come to the sheriff sales, [but] because they were not able to leave their businesses during business hours, they weren’t able to participate,” Bilal said. “Now we’re getting letters that are saying thank you because now they will be able to participate.”
Bilal added that virtual auctions would also save her department around $207,000 annually. According to Bilal the department would save the $10,000 a month paid to rent out First District Plaza in West Philadelphia for in-person auctions, as well as the $3,200 a month paid for the staff’s event lunches. It would also save $4,000 a month in payments to its previous auctioneer. Bilal said the new system would therefore be implemented at “no cost” to the city, with Bid4Assets being paid by a 1.5% fee being charged to the winner of an auction.
“The move to virtual will be a permanent one based on cost savings alone,” Bilal said. “It is a no brainer.”
This “no brainer” has been met with resistance. Representatives from Community Legal Services, an advocacy group that provides legal aid to marginalized Philadelphians, maintain that the virtual process could attract investors from outside the city who could hasten gentrification and cause displacement. CLS workers have expressed additional concern that these buyers could remain anonymous in virtual bids by registering their accounts through an LLC.
“We definitely heard from community groups and community members that this is one of the things they’re concerned about,” said Kate Dugan, a CLS staff attorney. “They’re concerned about new, out-of-town people snapping up properties in their neighborhoods.”
Bilal noted at the press conference that the increased accessibility for potential developers and the resultant increase in bids would mean that homeowners could ultimately recover more money from HART. She also said that the online bidding process could actually increase accountability and transparency by putting the process out in the open on the internet – something important for a sheriff’s office that has historically been accused of being biased towards influential and politically connected bidders.
“Switching to online environments also allow other benefits including eliminating the possibility of favoritism, intimidation, human error, and the other issues that have been raised about the sheriff sale in the past,” Bilal said.
Advocates at CLS, however, are concerned that sheriff sales on foreclosed properties which can be accompanied by evictions, were resuming at all at this time. Dugan said that restarting the sales could force people into vulnerable or crowded situations – all while the city and country still battling to vaccinate the population against COVID-19.
(Around 130,000 Philadelphians and 30.4 million Americans have tested positive for COVID-19, and more than 3,200 Philadelphians and 550,000 Americans have died of the disease.)
While a federal foreclosure moratorium is still in effect, it only applies to people living in the subset of houses with federally backed mortgages.
Bilal asserted at the press conference Monday that none of the properties being put up for sale were occupied, and moreover, there were only 24 properties set to go up for auction at all on April 6. Dugan disputes this – saying that she herself has a client that will be affected by the restart sales.
“I personally have a client that is on one of those [auction] lists, as do many of my colleagues at CLS,” Dugan said. “We’re worried about the public getting incorrect information about what kinds of houses are going up for sale.”
Dugan also claimed that the number of properties going up for sale is much greater than the sheriff had implied. She said that while there are only 24 mortgage-foreclosure properties going up for sale on April 6, scores more would go up for sale on additional tax sale dates throughout the month as a consequence of tax foreclosures.
“That’s potentially a lot of people,” Dugan said. “We’re worried that somebody who’s living in their house might have heard what the sheriff said and think ‘oh, I’m safe this month.’”
At press time, a sheriff office spokesperson had not yet returned a request for comment on whether the office stands by its assessment of the total number of properties up for auction and its assessment of their occupancy statuses.
Members of City Council harbors some of these same concerns. Councilmember Cherelle Parker announced Monday that she was planning to introduce a resolution asking to review the transition to an all-virtual auction model, as well as the decision to resume sales April 6.
West Philadelphia Councilmember Jamie Gauthier signaled opposition to the move as well, echoing the concerns sounded by CLS about transparency and community control.
“I do not believe that the City should be launching into such a radically different model for sheriff sales, especially at a time when so many Philadelphians find themselves in precarious housing situations,” Gauthier said in an emailed statement sent to the UC Review and Free Press. “Conducting sheriff sales in an online forum could have a variety of negative impacts, including sales to anonymous entities that are not good stewards of our communities.”
“I appreciate that the Sheriff’s office is concerned with the efficiency of their processes—but this efficiency can’t be at the expense of equity in our city.”
Efforts are also mounting at Harrisburg to stop the measure. West Philadelphia State Rep. Amen Brown introduced a legislative memorandum in the state house Wednesday, that would postpone all Philadelphia sheriff sales until “after the COVID-19 Emergency Declaration has been lifted.”
“We must protect our families and neighbors from this predatory act,” Brown said in text accompanying the memorandum, referring to foreclosures in the midst of a pandemic, with the emphasis his. “Please join me in co-sponsoring this legislation and help save our neighbor's homes.”
Bilal noted at the press conference that the sales were mandated by “the order of the courts, the [and] duty of the Philadelphia Sheriff Office is to ensure court orders, including when to hold sheriff sales.”
Notably, a Dec. 23 court of common pleas order schedules sheriff sales to resume April 6 –although the text of the order indicates that the date was set at “the request of the Sheriff of Philadelphia.”
At the Monday conference, Bilal told any Philadelphian concerned about losing their home to reach out to either CLS or City Council to look for support or aid programs.
“We still care about the people in this city, and for homeowners,” Bilal said. “The one thing they shouldn’t worry about in this pandemic, is somebody knocking on their door saying we’re coming to take your home.”
“We’re trying our best to streamline all of that to make sure that doesn’t happen,” Bilal added.
Anxieties about a resumption of sheriff sales and a permanent change to how their conducted is just the latest in a decades-long series of controversies surrounding the sheriff’s office.
Jewell Williams, who was the city’s sheriff before Bilal, serving from 2012 to 2020, was accused of sexual harassment by his subordinates, which led the city to pay out hundreds of thousands of dollars in legal settlements. John Green, who worked as Williams’ predecessor from 1988 to 2010, was sentenced to five years in prison in 2019. He was accused of taking bribes in exchange for awarding no-bid, sheriff department contracts worth millions of dollars.
The office has continued to be dogged by controversy under Bilal’s tenure. In November, Philadelphia City Controller Rebecca Rhynhart announced that she, with the help of Bilal, had uncovered that more than 200 firearms that were supposed to be in the sheriff’s office’s inventory had gone missing.
By February, moreover, three former sheriff office employees had sued Bilal. The trio alleges that they each had been retaliated against for trying to expose serious misconduct that they observed within the sheriff’s office, including alleged waste, theft, and sexual harassment. At press time, a sheriff office spokesperson had not yet returned a request for comment on these lawsuits, although the office has previously declined to discuss the litigation with news media, citing a policy to refrain from commenting on ongoing legal matters.
Despite these decades-old misgivings surrounding the sheriff’s office, Philadelphian homeowners and investors will likely still have to prepare themselves for impending move to virtual auctions.
Bilal, while emphasizing Monday how virtual auctions would be “major change for all involved in the sheriff’s sales,” because of the transition to virtual bidding, she also said that homeowners should take comfort in knowing the system would remain familiar.
“Nothing is changing for homeowners, homeowners’ attorneys, advocates, other than the venue,” Bilal said. “All the policies and procedures that were in effect for in-person sales will continue with virtual sales.”