Common Ground wants mortgage company owned by Bucks owner to contribute to foreclosure crisis

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MILWAUKEE (WITI) — Common Ground leaders gathered in the lobby of Milwaukee’s City Hall Wednesday, April 1st to encourage and pray for bold leadership from Mayor Tom Barrett and Common Council President Michael Murphy as they prepared for their meeting with Nationstar Mortgage.

Wes Edens, one of the owners of the Milwaukee Bucks is chair of the board for Nationstar Mortgage, and his company Fortress Investment owns the majority of the company.

Common Ground says no public money should be given to Edens and the Bucks to build a new arena in downtown Milwaukee. Instead, they are asking that Nationstar contribute $30 million to help with Milwaukee’s foreclosure crisis.

 

Over 75 Common Ground delegates held hands and bowed their heads at City Hall as Pastor Rob Ater sent their encouragement and prayers to the two most powerful elected leaders in the city of Milwaukee.

“We are pleased to see that Mayor Barrett and President Murphy will be meeting with Nationstar to negotiate around the next wave of the foreclosure crisis in the city of Milwaukee. We are confident they will represent the interest of our whole city,” said Mia Price, Common Ground leader.

Since 2008, Common Ground has been at the forefront of the foreclosure crisis. In 2011, Common Ground was able to negotiate $33.8 million from the world’s largest banks to rehabilitate and resell over 55 homes in Milwaukee’s Sherman Park Neighborhood. Since 2008 the city of Milwaukee has lost billions of dollars in the tax base. Due to tighter federal regulations on the large banks, banks have transferred many of their mortgages to non-bank mortgage servicing entities like Nationstar, Ocwen and Green Tree.

“These non-bank entities are not well-regulated and we see that the next wave of foreclosures in our city will be caused by companies like Nationstar,” stated Randy Jones, Common Ground Leader.

In the city of Milwaukee, Nationstar is the second-largest mortgage holder. They service 3,101 mortgages in our city. Currently, they have 298 of these houses that are foreclosed or vacant. The second wave of foreclosures could come because 1,624 of the mortgages serviced by Nationstar are delinquent, underwater, or delinquent and underwater.

Mayor Barrett and President Murphy were set to meet Wednesday afternoon with Nationstar representatives to negotiate a solution to avert this crisis. Representation from Nationstar includes: Executive Vice President Dana Dillard, Senior Vice President James McDermott and their local hired attorney, Ed Heiser of Whyte Hirschboeck Dudek S.C.

 

“Our mayor and Common Council president won’t sign some token agreement with Nationstar.  We know they love this city as much as we do.  We’ve got a major problem here and we believe our mayor and Common Council president understand this. We know Mayor Barrett and President Murphy will demand a financial response commensurate with the magnitude of the problem,” Common Ground Leader Jennifer O’Hear said.

 

The chair of the board of Nationstar Mortgage is Milwaukee Bucks co-owner Wesley Edens. Common Ground Leaders believe that Alderman Murphy and Mayor Barrett will demand that Wesley Edens and Nationstar make right by the city of Milwaukee before the city considers giving Edens a public subsidy to build a new arena for the Milwaukee Bucks.

 

Here are the requests of Nationstar that Mayor Barrett, Common Council President Michael Murphy and Common Council members should be putting forward to Nationstar:

 

1) Nationstar donate $25 million to the City of Milwaukee Challenge Fund to foster the rehabilitation of foreclosed properties.

 

2) Nationstar donate $5 million over five years to fund 5-10 housing counselors to go door to door to work with the 1624 families on the delinquent and underwater loans which Nationstar services.  The intention would be to prevent further mortgage foreclosures.

 

3) Nationstar assign a full-time person on the Nationstar staff to work with Milwaukee housing counselors to restructure mortgages.

 

“If a little community group like Common Ground can get five international banks to give $33.8 million to address the foreclosure crisis in Milwaukee, surely the two most powerful leaders in Milwaukee, Mayor Barrett and President Murphy can get $30 million from Nationstar. We are praying for you,” Jennifer O’Hear, Common Ground Leader said.

 

Common Ground has invited Mayor Barrett and Common Council President Murphy to report  their progress with Nationstar at the Common Ground Spring Assembly on April 29th at 7:00 p.m. at Mt. Mary University.

 

Common Ground said this in a statement to FOX6 News:

Common Ground is a broad based organization of congregations, schools, non-profits, small businesses and neighborhood associations organizing ordinary citizens to strengthen the common good in greater Milwaukee. For four years Common Ground has been addressing the foreclosure crisis in the City of Milwaukee. Common Ground has been negotiating with major banks and loan servicing companies to take responsibility for the damage they have caused in their lending and foreclosure practices. Common Ground is in the process of rehabilitating 100 foreclosed properties in the Sherman Park neighborhood of Milwaukee.

Nationstar Mortgage is a national mortgage loan servicing company, which services millions of mortgage loans throughout the country and several thousand in Milwaukee. Nationstar is owned by Wesley Edens,
one of the new owners of the Milwaukee Bucks, who are discussing with City officials their request for public money to finance a new arena for the Bucks.

COMMON GROUND BELIEVES THAT NO PUBLIC MONEY SHOULD BE GIVEN TO WESLEY EDENS AND THE MILWAUKEE BUCKS TO BUILD A NEW ARENA. THE BUCKS OWNERS ARE BILLIONAIRES AND DO NOT NEED THE MONEY AND CAN AFFORD TO BUILD THE ARENA THEMSELVES.

INSTEAD, WESLEY EDENS AND NATIONSTAR MORTGAGE SHOULD DONATE AT LEAST $30 MILLION TO THE CITY OF MILWAUKEE IN ORDER TO ADDRESS THE FORECLOSURE CRISIS IN OUR
COMMUNITY.

Nationstar services at least 3,101 loans in the City of Milwaukee and is in the process of buying additional servicing rights from Ocwen Financial, another national servicing company that services 4,871 loans in
Milwaukee.

According to Nationstar records, here is the status of these Nationstar loans:

Delinquent: 680, Underwater: 652, Delinquent & Underwater: 292, Foreclosure: 217, Real Estate Owned: 81

Common Ground has visually inspected the 300 properties, which are in foreclosure or are REO. Many of these properties are vacant and deteriorated. Based on our experience, many of these delinquent, foreclosed and REO properties will end up in the hands of the City of Milwaukee as Nationstar makes decisions to “charge off” various properties. This means Nationstar lets the property go to the City in tax foreclosure for non-payment of property taxes. The City of Milwaukee now owns 1,100 tax-foreclosed properties, which have come from Nationstar as well as other banks and servicing companies.

Based on Common Ground’s experience in rehabilitating foreclosed properties, it costs $50,000 to $75,000 to bring these properties into code compliance. Thus the City would need $55 to $82 million to
rehabilitate these properties.

The City has established a Challenge Fund to stimulate the rehabilitation of the City owned foreclosed properties by local nonprofit organizations, but currently there is only $1 million allocated to
this fund.

Here are the requests of Nationstar that Mayor Barrett, Common Council President Michael Murphy and Common Council members should be putting forward to Nationstar:

1. Nationstar donate $25 million to the City of Milwaukee Challenge Fund to foster the rehabilitation of foreclosed properties.

2. Nationstar donate $5 million over five years to fund 5-10 housing counselors to go door to door to work with the 1,624 families on the delinquent and underwater loans which Nationstar services. The intention would be to prevent further mortgage foreclosures.

3. Nationstar assign a full-time person on the Nationstar staff to work with Milwaukee housing counselors to restructure mortgages.

Meanwhile, on Wednesday, the Hispanic Chamber of Commerce Wisconsin announced its support for the new downtown Milwaukee Bucks arena — joining “Play it Forward Wisconsin” — a growing coalition of business and community groups supporting the downtown arena.

The Hispanic Chamber of Commerce says a new downtown arena has the potential to transform Milwaukee and create a new economic vibrancy for the city.

The NBA has said that without a new arena, the Milwaukee Bucks franchise will be relocated to another market.

To date, the Bucks’ ownership has pledged $250 million toward construction of a new, state-of-the-art entertainment center and Governor Scott Walker has proposed more than $200 million in state assistance to the project. The state’s financing, however, must be approved by the Legislature and requires a local contribution for which the city and county have not yet specified a source or amount.

It also remains unclear where a new arena would be located.

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