U.S. Bank has committed more than $16 million to revitalize Milwaukee housing, and the lender is not the first to do so. In Milwaukee, four banks have now committed to providing resources to “improve and stabilize housing and homeownership efforts in the city”[1]. Bank of America, Deutsche Bank and Wells Fargo have also committed various amounts for a total of $15.2 million to help the community, focusing specifically on a troubled area called Sherman Park. Funds will be used for neighborhood cleanup, development and recruiting qualified buyers to the area.
So what is Milwaukee doing differently than other cities around the country that could also benefit from such active community lenders? According to Alderman Michael Murphy, it is the community’s “Common Ground” initiative that led the way. “Our goal and the goal of Common Ground was to work with the five largest institutions that played a significant role in the foreclosure crisis,” he said, pointing out that four of the five have already come forward to help and that they expect that Chase, the remaining lender of the targeted five, is expected to “be coming to the table with an offer shortly.”
Milwaukee’s Common Ground program was started in 2008 as a coalition of “religious congregations, businesses, schools, unions, neighborhood groups and non-profits” that worked together to “face social issues in Southeastern Wisconsin.” In 2009, the group decided that the best way to deal with the foreclosure crisis in the area was to tackle it head-on by simply asking banks to help deal with the problem or, as Common Ground puts it, “to help clean up the mess they created.” Although kebders were not initially receptive, trips to shareholders meetings ultimately swayed Wells Fargo and three other members of the “big five” in the area soon followed suit[2]. Common Ground’s goal is to convince the lenders and the people who run those companies to come forward – without litigation – to “do the right thing.” So far, it seems to be working out pretty well for Milwaukee.
Do you think that Milwaukee’s success with Common Ground can be replicated elsewhere?
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[1] http://www.jsonline.com/news/milwaukee/127488178.html
[2] http://consumer.einnews.com/247pr/226764
Yes it can. To clean up this mess, it is going to take efforts like this from all parties that were a part of this problem, Banks, the gov’t, borrowers and other groups that are involved in the housing market. But as usual, the Banks I believe are just here to save face. Wells Fargo made $80B in the first quater of this year, what is a couple of million out of their pockets? The real solution to this problem is, stop dragging it out, foreclose on these properties, let the investors(ie, the market) pay what they are willing to pay, and lets move on. The gov’t is trying to dictate prices, and it is not working, so they keep coming up with different ideas and those are not working either.