Foreclosures in the City Rises due to Increasing Unemployment
Renewed crisis of rising foreclosures is seen in the city of Milwaukee. More inhabitants are yielding up their houses to foreclosures due to the increasing rate of unemployment, sub-prime mortgages and other difficult loaning policies. The Common Council Committee of the city has observed that the steady increase in foreclosures would have a disastrous effect on the financial condition of Milwaukee. The future seems rather bleak if the situation is not controlled effectively.
The value of property in the city has reduced and the houses that were sold at about 4200 dollars in 29 are now selling at a paltry price of 10,000 dollars only. Maria Prioletta, as the project manager of the Department of city Development, has observed that a lot many owners are selling their houses at any price offered to relieve themselves of the burden.
Some of the foreclosed houses are being sold to non- residents of Milwaukee. At present the number of foreclosed houses owned by banks has risen to 1223. Nearly 275 houses are tax foreclosed and these are usually owned by city dwellers. However, foreclosed houses owned by the banks are gradually lessening due to the reduction of prices and the entry of more buyers into the city. Since 2008 there has been a rise of twenty percent in the number of foreclosures.
Chairman of the Finance Committee, Michael Murphy is hard at work to alleviate the crisis by pointing out that it is the direct result of the effect of taxes levied on the people, in case the purchase prices dropped by eighty percent in the next two years.
Murphy also feels the reduction in the taxes will add to the burden of the city’s depleting financial condition, while the empty foreclosed houses will become a den of illegal activities. If they are bought by owners who reside elsewhere the situation will pose even more problems.
The sub-prime loans are higher that other loans and such loans have affected the low income groups adversely. These loans were popular in 2005 and the maximum number of subprime loans was meant to refinance the existing property owners. According to Maria Prioletta, most of the residents of Milwaukee are facing foreclosure due to the because of their jobless status.
Though stabilization programmes have granted financial aid to improve the condition in the city it has worked for forecloses alone but has not been able to help to people avoid it. Besides, the educational services regarding ownership, rendered by the Milwaukee Foreclosure Partnership, are all aimed at keeping the rising foreclosures at bay.
