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Do Not Be Overwhelmed By Your Debts

Major Wisconsin city may suffer from damaging foreclosure cycle

On Behalf of | Feb 21, 2013 | Debt Relief, Firm News |

For Wisconsin homeowners, any sudden financial challenges may upset the sensitive balance of debt and income, pushing their properties closer to foreclosure. Despite the availability of debt relief options, fear of losing financial control may prevent individuals from filing for bankruptcy or pursuing other recovery programs. Milwaukee has started to see the possible side effects of widespread debts and foreclosures; these may potentially trigger declines throughout entire neighborhoods and pave the way for increased rates of crime.

Three specific neighborhoods were reportedly pinpointed for having two shockingly similar traits: high rates of violent crime and large numbers of vacant or foreclosed properties. According to the mayor, the city appears to be experiencing the fifth year of an ongoing foreclosure problem that appears to have reduced the neighborhoods’ total real estate value by an estimated $3 billion.

Within these three Milwaukee neighborhoods, reports say that foreclosure actions have affected 49 percent of the homes that have been vacated or considered for demolition. While the regions in question account for only two percent of the city’s land, about eight percent of citywide crime is attributed to these neighborhoods. Reports suggest a chunk of these crimes involve robbery in vacant homes, heightening difficulties for those residents who remain in the affected areas.

Of the 500 properties the city intends to raze, more than 100 fall within these three high-crime areas. While the city apparently aims to reduce criminal activity by removing abandoned homes, a statement by one alderman suggests that excessive razing is a long-term hindrance to the city’s real estate infrastructure.

The gradual devastation of Milwaukee neighborhoods could perpetuate a cycle of debt and foreclosure as crime and vacancy drag down local property values. Maybe instead of focusing on razing neighborhoods, governments should focus on how to help people keep their homes.

Source: jsonline.com, “Foreclosures, crime go together in some Milwaukee neighborhoods,” Don Walker, Feb. 14, 2013