May 26

The Mayor and head of DNS discuss the “zombie” housing problem in  this Milwaukee Journal article.  The article is interesting, the comments even more so.

“City officials define [zombie housing] a bit more precisely: when title to a property remains with someone who believes he or she has lost the property as a result of foreclosure. “

“Both Dahlberg and Barrett say they don’t understand why banks allow the problem to proliferate. “

While zombie housing seems to be a new phenomena to the city officials, we discussed it since at least July 12, 2009.

https://groups.yahoo.com/neo/groups/ApartmentAssoc/conversations/messages/11702

https://groups.yahoo.com/neo/groups/ApartmentAssoc/conversations/messages/11828

http://justalandlord.com/?s=zombie

At that time I predicted the ordinances that had just been passed to make lenders more accountable would actually result in many more properties abandoned by both the owner and the lender.

The city also makes matters worse through reinspection fees.  I’m sure they think this is a cash cow, but it is a further cause of the abandonment problem.  On the front end these fees force marginal owners into failure and on the back end they make it less likely the lender or owner can sell the property.  Banks that control foreclosures in Milwaukee have adopted a policy of not paying taxes until the property sells.  When they receive offers they run title prior to accepting offers. Too many fees and they let the property revert to the city.

This was the case with two singles on one lot that I made an offer on a couple of years ago.  Bank ran title and rejected the offer due to reinspection fees (the front house was owner occupied, there was a sewer back up that they could not afford to fix and suddenly they were being billed $375 a month)   The city then foreclosed on taxes, the property was stripped of metal, druggies used it as a dry place to get high and finally they started the one house on fire, that in turned burned down a neighboring house, taking it off the tax roll too.  All along the city has had to mow the yard, shovel the walks, reboard it as it kept getting broken in.

Here is a post on how the city’s ordinances, no matter how well intended or logical on the surface, are actually contributing to the problem.

One Response to “Mayor and DNS on “zombie” housing in Milwaukee”

  1. […] But at least the city was able to tack some fees on it. Fees that they never collected because when the City becomes the owner the only thing left to do was bulldoze  them. (The one pictured in the link is now a mud lot).  Many of these are Zombie Houses […]

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