By Chris Thompson
Milwaukee wants banks and other lending institutions to have a little skin in the foreclosure game.
Southeastern Wisconsin Common Ground wants the entire hide.
A new Milwaukee law is forcing the owners of foreclosed properties to pay $250 every six months to register the property. The fee can double or triple if the property owner fails to maintain the building exterior, board up the windows and generally do what’s needed to prevent crime.
The idea is that banks or other institutions, not wanting to pay more than the minimum, will demolish the buildings and make it easier for someone to buy the land and rebuild.
It’s a heavy-handed approach, but not heavy enough for Common Ground, which argues bad bank loans are to blame for foreclosures, and, as such, three targeted banks tied to foreclosed properties in southeast Wisconsin should kick in $25 million apiece to renovate the buildings.
That’s not going to happen, nor should it.
Forget, for the moment, that social responsibility is a two-way street, and those who take out loans have a responsibility to repay the debt. Focus instead on the long view that Common Ground apparently chooses not to see: If banks have to pay millions for loans deemed irresponsible by a social group, then banks will adjust their lending practices to avoid any risky loans.
That means requiring way more money down before someone qualifies for a loan. That means loans become very elusive. That means it becomes much more difficult for people to buy homes.
Odds are that’s not the outcome Common Ground is expecting as it reaches for that pound of flesh.
Chris Thompson is the editor of The Daily Reporter. He can be reached at [email protected]