You Broke It… You Fix It…

As some of you know from a past post about Common Ground (a grass-roots organization), CG is in the midst of a foreclosure battle with Wells Fargo, US Bank, and Deutsche Bank. Tonight was the launch of their campaign, “Faces of Foreclosure”.

Common Ground hopes to:

[Launch] a campaign focused on banks who own or hold in trust the most foreclosed homes in Southeastern Wisconsin (Deutsche Bank, US Bank, and Wells Fargo) requesting the “reasonable disposition” of the hundreds of properties in Southeastern Wisconsin.

In 2009, Common Ground members conducted several neighborhood walks around the Amani area (22nd and Center). In ten square blocks, we identified 60+ abandoned homes, six of which were owned by Deutsche Bank, a German owned bank. We got curious and our research found at least 1600 bank-owned home over 600 were owned by 3 banks, US Bank, Wells Fargo Bank and Deutsche Bank. These three banks received over $47 billion in federal bailout funds.

Common Ground members photographed over 400 of these homes and talked to neighbors of these properties. We have also talked to bankers, community leaders, real estate agents and home rehabbers to understand this problem better.

We are demanding that these banks do three things:

  1. Responsible/Accessible Foreclosure Sales– Stop selling the homes to “speculators” through auctions or mass sales and work with us to develop a plan to sell these properties to responsible owners.
  2. Demolition– Pay for the demolition of the properties beyond rehabilitation and donate the land to a community land trust for future residential construction.
  3. Rehabilitation Fund– Each bank contribute $25 million towards a $75 million fund which will be used to rehabilitate and sell these properties.

For more information on this issue: http://www.facesofforeclosurewi.org/

http://www.todaystmj4.com/news/local/82182367.html

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4 Responses

  1. A few items to consider:

    – These banks did not single handedly “break” this system.
    – How does a bank determine who is a “responsible” owner. Who’s job is it to make that judgement? Should I have to do this when I sell my house? In most cases, a homeowner (bank or otherwise) will never meet the person or entity purchasing their property.
    – Pay for demolition — yes, the bank must, if they own the property and it necessary to demolish it. Donate to community land trust? Not the bank’s obligation.
    – $25 million contribution? Also not the bank’s job.

    This entire excerpt is a great example of the anti-corporate, hand-out demanding culture that has permeated much of our society. The banks owe their duty under the law. Nothing more.

  2. they didn’t break “the system”, and what is the system you’re talking about? they own 600 homes that are not being kept up costing the city and tax payers thousands of dollars. because the banks legally own the homes they are responsible for the up keep of them. they have been negligent, causing the other homes in the neighborhoods they are in to decrease in value, not to mention the liabilities they bring such as crime, gas leaks, the risk of fire, etc. responsible owners = someone who will give back to the community. the banks are selling to “speculators” who buy in bulk rather than sell to a family or church (in one instance) who wanted to pay in cash for the full asking price although the house was worth much less. the bank does decide who they sell to. they may not “meet” them as you say, but they will see what entity is buying the house, whether it be a “speculator” or a family. the donation to the community land trust is really just the $75 million rehab. fund.

    you seem to be disgusted at the idea that the community ask for “hand outs” from the banks who have been negligent landlords helping to increase crime and decrease value of the neighborhood. and yet you said nothing about the $47 billion dollars the banks received in corporate bailout money. it would seem to me that the banks would be the ones to be criticizing rather than a community who simply wants their neighborhood restored and nothing more.

  3. Here is what I will say about the bailout. I am NOT a proponent of the TARP funds. There are a lot of misconceptions about them, however. The biggest recipients of the funds are not banks. AIG (insurance), Fannie Mae (government sponosored entitity – GSE), General Motors (auto), and Freddie Mac (GSE) received over $200 billion and were the top 4 recipients of the nearly $600 billion committed so far.

    The TARP money is a loan, not a handout. Many of the banks have already repayed this loan with interest, including US Bank and Wells Fargo. This is exactly what homeowners were not doing for the banks. (Freddie, Fannie, and AIG have not yet returned any of the money). Deutsche Bank, though benefitting from the stability added to the system, received no TARP loan.

    Again, the banks owe their duty under the law. I agree they should pay taxes, pay back the TARP funds, and maintain the homes properly.

    Bulk sales are necessary because of the market. I do not know about the specific case you referenced; I would be interested to hear more information. However, it would be wrong (maybe illegal?) for a bank to refuse to sell to someone simply because they are an investor.

    Also, the reason the banks have so many homes is because families could not afford to own them. Their is currently no demand in the market (o a broad basis) from homeowners. Because community members can only afford to rent, these properties will generally sell as rental properties.

  4. you raise very good points. and i agree that the demands made by CG are a bit illogical. but i do think that the banks need to be responsible home owners. at the very least they should pay for all the up keep, both past and present of the homes. i also think that the banks should make it easier for responsible buyers (whether the buyers are investors or otherwise) to actually buy the homes. and thank you for clarifying what TARP loans entail, who has received them and who has paid them back. i think that these are important issues that CG would like to take into account when they meet with the vice-presidents of US and Wells Fargo Bank. you can contact CG either via their website or the faces of foreclosure one.

    http://www.commongroundwi.org/how-to-get-involved/

    http://www.facesofforeclosurewi.org/get-involved/

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