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The Impact of Foreclosures in Milwaukee
Foreclosure rates continue rising in the Milwaukee area, leading to increased crime, lower property values and decrease city revenues. However, new alternatives are available.
March 07, 2010 /Personal Finance PR News/ -- The Impact of Foreclosures in Milwaukee
Foreclosure rates continue rising in the Milwaukee area, affecting more than the foreclosed homeowners. Empty properties and cheap deals could increase crime, lower property values and decrease city revenues, which are already tightly stretched. The good news is that new alternatives to foreclosure are available.
Maria Prioletta of the Milwaukee Department of City Development said the city recorded more than 10,000 foreclosure filings in the city during the last two years, and the 2010 total may be even higher. According to the Milwaukee Journal-Sentinel, Milwaukee foreclosure filings increased 12 percent in February from the same month in 2009.
These foreclosures have wide and serious impacts. An Urban Institute report in 2009 noted that property values declined by 1.3 percent within 300 feet of a foreclosed home, and 0.6 percent within 660 feet (typically homes on the next block). The same report also noted a 2.3 percent increase in violent crime for each 1 percent increase in the foreclosure rate for the average census tract.
The Urban Institute also found that 64 percent of city governments were less able to meet fiscal needs in 2008 than 2007, a number that was significantly driven by rapidly rising foreclosure rates. Foreclosures and cheap resale values reduce tax revenues, and lower property values also lower revenues. Meanwhile, foreclosures create legal paperwork and police and fire expenses for city governments.
Local alternatives available
The University of Wisconsin-Milwaukee recently completed a study that also found that high foreclosure rates are driving up student mobility and driving down education levels, especially in low-income neighborhoods.
However, many homeowners have alternatives to foreclosure. The Legal Aid Society of Milwaukee has long worked with low-income city residents, particularly by taking on disputes with predatory lenders.
Meanwhile Marquette University Law School has seen success in running the new Milwaukee Foreclosure Mediation Program. A Milwaukee judge ruled in July 2009 that all foreclosure filings must include a notice of mediation.
Mediation Coordinator Amy Koltz told the Wisconsin Law Journal that the program kept 107 homeowners in their properties in the first six months. Homeowners who own and live in the same property must request mediation within 15 days of receiving a foreclosure notice. They also must pay a $100 fee and meet with a certified housing counselor. Marquette organizers and trained volunteers serve as the mediators and attorneys for homeowners, who often have no legal representation, Koltz said.
Judges created a similar program in nearby Outagamie County. The state senate is also considering expanding the successful mediation program statewide. A proposed bill would require the homeowner to meet with a financial analyst and require lenders to consider debt restructuring options.
Federal options also on table
Another alternative for some homeowners is the new federal Making Home Affordable program. The program helps negotiate refinancing options for homeowners with Fannie Mae and Freddie Mac loans. The program Web site offers an eligibility assessment form for homeowners to help borrowers determine if they qualify for help.
On the other hand, some are taking advantage of the foreclosure crisis to prey on desperate homeowners. Federal officials warn about the dangers of foreclosure rescue and loan modification scams. Homeowners facing foreclosure need to beware of upfront fees for counseling services, companies that pressure them to sign papers or transfer their deeds.
Speak to an Attorney
If you are facing foreclosure and have questions about the alternatives available to you, speak with an experienced attorney in your area. A lawyer can explain your legal options, answer your questions and help you determine the best path for you based on your situation.
Article provided by Debt Advisors, S.C.
Visit us at www.mydebtadvisors.com
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