Common Ground addresses area’s foreclosure problems

Although the subprime mortgage meltdown started a year ago, the thousands of resulting home foreclosures are still hurting southeastern Wisconsin, and residents are still searching for relief.

Hundreds gathered at the Milwaukee County War Memorial Center Thursday night for a Common Ground hearing to discuss potential solutions to the problem. Common Ground is a local activist group that helps people find jobs, homes and health care.

The group has been documenting local foreclosures in Milwaukee, Waukesha, Ozaukee and Washington counties for three months, said Bob Connolly, Common Ground’s president. The group sent out 160 volunteers to interview community members and photograph boarded-up houses. Common Ground will publish its findings in a foreclosure action paper in December, Connolly said.

The goal is to find some way to take corrective action on the issue, said Jean Dow, an associate pastor at Immanuel Presbyterian Church, 1100 N. Astor St.

The negative effects of home foreclosures on neighborhoods troubled panelists the most.

“(Empty homes) affect families in a major way,” said Willie Davis, a pastor at Greater New Birth Church, 2207 W. Center St.

Davis became involved after “thugs and crack-heads” gathered around empty homes near his church and frightened younger members of the congregation, he said.

Lt. Al Jansen, a co-chairman of the Milwaukee Fire Department Safety Committee, said criminals break into empty buildings and have used them for methamphetamine production and dog fighting. Some houses are also stripped of their wiring and plumbing. There are also concerns with gas leaks and electrical fires, Jansen said.

The poor conditions have led to an increase in firefighter injuries when the fire department is called to a vacant house, he said.

Shar Borg, a realtor with Shorewest, said she ran into trouble while trying to help a church buy a bank-owned duplex at 44th Street and North Avenue.

“These banks are the worst absentee landlords you could ever run into,” Borg said.

Alderman Michael Murphy, chairman of the Common Council’s Finance and Personnel Committee, said the approximate 5,000 foreclosures impact the city budget. Hiring additional property inspectors to monitor vacant houses and dispatching police and firefighters to them adds millions of dollars to the city’s expenses each year, Murphy said.

The subprime lending crisis that crippled the American banking system last year is why there’s been such a drastic increase in home foreclosures in Milwaukee, panelists said.

Catherine Doyle, an attorney with the Legal Aid Society of Milwaukee, 521 N. 8th St., said brokers misrepresented their subprime loans to people looking to buy homes.

Eventually, the adjustable interest rates on these loans increased and left thousands unable to make their monthly payments, said Lew Ameel, a housing specialist with HBC Services in Waukesha.

Milwaukee was hit particularly hard because subprime lenders targeted cities with many low- to medium-income citizens, said Margaret Henningson, founder and vice-president of Milwaukee’s Legacy Bank, 2102 W. Fond Du Lac Ave. She said her bank tried to steer them away from buying homes they couldn’t afford, but had little success.

“When people have house fever, it’s hard to talk them out of it,” she said.

These bad mortgages were bundled and sold as packages to banks. Deutsche Bank in Frankfurt, Germany, Wells Fargo in San Francisco and U.S. Bank in Charlotte, N.C. own many of the foreclosed properties in Milwaukee.

Henningson said she is confident Common Ground can help alleviate the foreclosure problem by influencing responsible owners to buy vacant houses and taking steps to either make them habitable or demolish those that aren’t.