Apr 16

New rule to help Milwaukee monitor foreclosed properties – JSOnline

Some of the highlights from the Journal article:

Under the new rule, which the Common Council passed Tuesday, the bank or financial entity involved must notify the city as soon as the foreclosure action is started. That way the city can more closely monitor and inspect properties to prevent problems from growing, Dahlberg said.

Once a property becomes abandoned, the owners will be required to post the name of the responsible party outside the property so people know whom they can call, Murphy said.

 

My comments:

Foreclosed, boarded buildings are indeed a drain on the neighborhood. 

We do an exterior survey of all of our properties every year at the end of February, beginning of March to select our exterior projects for the coming season. As I was doing our surveys this spring in the neighborhood west of 16th Street between Mitchell and National this spring I was shocked at the number of boarded and abandoned houses. The neighborhood looks terrible due to this.

I don’t necessarily see where the new ordinance will improve things however.

Rather than hoping the foreclosing lenders comply with yet another ordinance they are unlikely to know about, the city should simply have a clerk follow the lis pendens filings. This is the first step in a foreclosure. With a subscription to the Daily Reporter a city employee can follow these without ever leaving the office.

The bigger problem for the city are the ones similar to the 1100 Block of South 11th Street described by Commissioner Dahlberg in the article. This particular property is one of the “non” foreclosures I wrote about on the ApartmentAssoc email listserver  back in 2009.

Lenders quickly became aware of the hostile environment they faced in the city of Milwaukee. Despite making some really stupid loans in the mid 2000’s, the lenders were smart enough not to take a second beating at the hands of the municipalities. So they reacted by simply not completing the foreclosure. Even today the title to this property remains in the name of the “former” owner.

In some cases, particularly on the near Northside of Milwaukee, lenders responded by not even filing foreclosure suits. Rather they just sued the owner personally for the amount of the mortgage, leaving the property in the owner’s name and a mortgage lien in place. When the owners saw they were being sued by IndyMac or Deutsche Bank they assumed it was a foreclosure and simply walked away, unaware they stilled owed a property they never could sell.

Both situations create Zombie housing that cannot easily be returned to the market. Yes the rumble you hearing the background are the bulldozers being paid for by your tax dollars.

I don’t fault the Council or DNS. While I can see the problem I too have no real answer. The best I can come up with is for the city to aggressively pursue tax foreclosures on vacant properties. This would clear title so a new owner can step in and buy the property without title problems.

If you have a better solution, post it in the comments here.

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