City of Milwaukee officials warn of another possible wave of foreclosures

Milwaukee officials on Thursday detailed new concerns that another wave of foreclosures is on the horizon that could damage vulnerable neighborhoods still recovering from the last housing crisis.

At issue is information that major mortgage-servicing companies have given to the city and community groups like Common Ground that suggest there are hundreds of properties that are delinquent on loans or are underwater, meaning property owners or the holder of the mortgage owe more than the home is worth.

Aaron Szopinski, the city’s housing director, sounded the alarm that Mayor Tom Barrett and the city did not want a repeat of the years following the recession.

“What we do know right now is not very good,” Szopinski told members of the Common Council’s foreclosure and abandoned homes committee. “We do not want a sequel.”

According to city officials, there are three large mortgage servicing companies that are responsible for many troubled properties in the city. One of those, Nationstar Mortgage, is largely controlled and owned by Fortress Investment Group, a hedge fund co-founded by Milwaukee Bucks co-owner Wes Edens.

Edens’ involvement with Nationstar — he sits on its board of directors — has brought a political dimension to the housing issue because of the Bucks’ ongoing efforts to build a new downtown Milwaukee arena.

Read on.

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