The sad remains of 2309 N. 46th St. Photo by Kris Wiktor
In the first year that 2309 N. 46th St. was vacant, it was noisy. Break-ins stripped the house of its plumbing, wires and anything salable. It became little more than a husk with an address.
George Wilson, who lives next door, often came home in that first year to find the empty house’s back door standing open. And at night, he’d hear noises coming from the weather-worn structure as “it was gutted.”
All he could do was ignore them.
Months later, when there was nothing left to loot, the noises stopped. As if on cue, someone came by and bolted heavy green and black plywood panels to the first-floor windows and over the opening that used to be the front door.
This, judging by Wilson’s account, was some three years after Countrywide Home Loans Inc., then owned by Bank of America, foreclosed against the owner in 2008. It took the bank until 2011 to schedule the sheriff’s sale in which it actually acquired the deed.
Milwaukee lawyers and city officials say lenders are often slow to schedule such sales, if they ever do, in the fray of a persistent foreclosure crisis that’s already flooded real estate portfolios with low-value homes. Nationally, the phenomenon is called “lender walkaway,” and in Milwaukee, as in other cities, it’s blamed for worsening neighborhood blight. Owners often move out, thinking they’ll lose their homes. But that’s not always the case.
“This is devastating to communities,” says Catey Doyle, chief staff attorney at the Legal Aid Society of Milwaukee, which represents low-income defendants in foreclosure cases.
Experts say that even when lending institutions schedule sales, bid successfully and are on the brink of taking a house, they sometimes stop in their tracks. Lenders may decide they don’t want the house if it’s been damaged, plundered or neglected.
“They’re sometimes getting into a property, seeing how bad it is and asking the court to undo the sheriff’s sale,” says Jay Unora, an assistant city attorney.
Banks don’t want to affect their bottom line, and that’s totally legal. “You don’t have to take a property back in a sheriff’s sale proceeding if you don’t want to,” he says.
What’s left is a house “in this weird, no-man’s-land territory,” says Kathleen Scott, an organizer for the Common Ground community group, which has lobbied to have 2309 N. 46th St. torn down at Bank of America’s expense. As long as a judgment of foreclosure remains in force, a lender may make a claim on a residence.
As a result, homes “will sit there for a couple years,” says Maria Prioletta, redevelopment and special projects manager for the Milwaukee Department of City Development, until the city takes them for back taxes. At some point, lenders decide “it’s not going to be worth my while,” she says.
But by then, these properties are in rough shape. “A lot of them have been stripped of all metal and left with their windows and doors open,” says Clifton Crump, DCD’s real estate project manager. “In some cases, the only option is to raze the property.”
To get a better handle on the issue, DCD officials looked at a batch of 140 properties the city acquired through back taxes in 2011. Some 45 percent still had mortgages on them, they found. Were these cases of “lender walkaway”?
“You would assume the mortgage companies had walked away,” Doyle says.
Prioletta isn’t entirely sure, but adds: “We know it’s occurring. We have anecdotal stories, but it’s hard to say precisely what the universe is.”
As of this spring, the city’s Department of Neighborhood Services had tentative plans to demolish 2309 N. 46th St. unless Bank of America, which declined requests for comment, rehabbed the house or razed it.
If the house is torn down, Wilson wants to start a community garden on the empty lot left behind. “Might be a good place for some fruit trees,” he jokes, leaning over his porch’s front steps. But his wife is wary of the foot traffic a garden would bring.
As of late April, the stoop that once led up to the decaying house next door was long gone, broken away. A city inspector, who posted a notice earlier in the month, would have stood in the dirt left there (maybe stepping around a soggy foam football) as he stapled the paper alleging a violation of sanitary rules, specifically “debris in rear yard,” to a panel of bolted-in plywood.
Nobody, he might have thought, would ever come home to this house again.