America's Foreclosure King accused of Fraud

When I read the Huffington Post article on Deutsche Bank, I remembered where I heard the name before.  Deutsche Bank is being accused of fraud by the U.S. government, of repeatedly lying to the Department of Housing and Urban Development (HUD) about the quality of Federal Housing Administration (FHA) mortgages.  HUD guarantees the FHA loans, but they have to meet certain conditions.  Which Deutsche Bank apparently lied about.  The U.S. is suing Deutsche Bank for at least $1 billion.  Yep, that's at least one billion dollars.

This is why self-regulation rarely work.

As part of the FHA program MortgageIT participated in, lenders are required to annually certify that they check basic records like borrowers' incomes, credit history and employment record. The lenders also are required to review loans that quickly default to guard against sloppy lending practices, and act in the government's best interests because taxpayers are bearing the risks for potentially poor loans

Deutsche did none of those things, according to the lawsuit.

As a result, "A third of those mortgages, or about 12,500, have since defaulted, leaving the government on the hook."

This leads to the context that I remembered Deutsche Bank from:

More than 40 members of Common Ground Wisconsin traveled to the Chicago Consulate May 18 with their request to open a dialog with the Germany-based bank. So far, Common Ground has been turned away by bank officials. Wells Fargo and U.S. Bank are meeting with Common Ground leaders to find solutions to Milwaukee’s foreclosure crisis.

Deutsche Bank is one of three banks Common Ground has been negotiating with that hold mortgages or are the trustees for more than 25 percent of foreclosed houses in Milwaukee. Wells Fargo and U.S. Bank are also meeting with Common Ground leaders to find solutions to Milwaukee’s foreclosure crisis.

For an idea of the impact that Deutsche Bank had on Milwaukee, and how it plays at home in Germany, go to this article translated from German.

Deutsche Bank’s tracks lead through the entire American real estate market. In Chicago, the bank foreclosed upon close to 600 large apartment buildings in 2009, more than any other bank in the city. In Cleveland, almost 5,000 houses foreclosed upon by Deutsche Bank were reported to authorities between 2002 and 2006. In many US cities, the complaints are beginning to pile up from homeowners who lost their properties as a result of a foreclosure action filed by Deutsche Bank. The German bank is berated on the Internet as “America’s Foreclosure King.”
----
A Victorian house on State Street, painted green with red trim, is now partially burned down. Because it can no longer be sold, Deutsche Bank has “donated” it to the City of Milwaukee, one of the Common Ground activists reports. As a result, the city incurs the costs of demolition, which amount to “at least $25,000.”

To their credit, Common Ground was able to persuade Deutsche Bank to meet with them and to promise to cooperate with efforts in the community, thought it took extraordinary efforts.  Fortunately, Wells Fargo and US Bank are much more involved in the community, and were much more willing to work with community leaders on the foreclosure crisis.

Transportation policies & Mayors

Two articles that provided for a jarring contrast.

The first, an article about how Governor Walker and the state is pushing for an upgrade in Hwy 41 from Milwaukee to Appleton, having it designated as a new interstate, similar to I-43 and I-94.

Getting the road up to minimal interstate standards in the coming years would cost $15 million to $20 million. That would involve widening shoulders and installing cable guardrails along some medians.

The second is a report about the U.S. Conference of Mayors, and a survey showing that many mayors feel that federal transportation dollars are not allocated in an equitable manner.

As the federal government sets priorities for long-term spending and deficit reduction, future transportation infrastructure investments should prioritize spending on pressing metropolitan transportation infrastructure needs as opposed to low-priority expansion projects such as the infamous Bridge to Nowhere. The long-term productivity of transportation infrastructure spending is greater when it is invested where economic growth will occur, and over the next 20 years, 94 percent of United States economic growth will occur in metropolitan areas

A mayor was particularly blunt about the issues affecting transportation dollars.  Mayor Reed of Atlanta had some strong words:
 

Mayor Reed said the disconnect between state and local governments is essentially a tension between the needs of rural and urban areas. “There is a dominance of the rural parts of the state that I think creates a bit of imbalance from the economic reality,” he said. He called it “old-school politics."
 
“I spent 11 years in the Georgia general assembly,” he said.”Anytime I needed to get an important bill I knew I would be in the car for a couple of hours going to see some chairman of a committee who was in Tallapoosa or Houston County or some other part of the state because there was a dominance there.”
 
“Now I like rural folks as much as anybody,” he went on, “but the fact of the matter is when you look at how our dollars are deployed at the state level they’re deployed in a fashion that is inconsistent with where jobs are and where the economy is created.” That was fine when the U.S. was the world’s incomparable economic superpower, but we need to be more thoughtful with our spending these days, he said.

In related news, the Regional Transit Authorities created in 2009 are in the process of being eliminated by the budget committee. 

The committee also voted to eliminate the state funding for bicycle and pedestrian paths.  And how does most mayors feel about those kind of decisions?

Three-fifths of mayors also said the lack of funding for bicycle and pedestrian projects was a problem.“These aren’t gimmicks anymore,” said Reed. “They’re part of a having a high quality of life in the cities where we live.”

Blog Changes

Regular readers may recall that this blog originally started as a blog of the Waukesha County Affordable Housing Taskforce, which later changed to the Affordable Housing Taskforce in Waukesha County.  Although housing issues are regularly discussed in this blog, there has not been much news on the Taskforce's activities.

Part of this is because the members of the taskforce have been involved in an introspective discussion of our activities and our mission.  While we will continue to advocate for a Housing Trust Fund in Waukesha County (see our very first post), we are evolving to advocate for better housing policies in Waukesha County. 

As part of the change in our mission, we are transitioning to a new name and a new website.  We are very excited about the change to Thrive Waukesha, and hope that you can be part of it. 

Our mission is to promote communities in Waukesha County that thrive because people are able to live and work in them.

And what will happen to Creating Communities?  For the moment, it'll continue as a housing issues blog, although no longer officially affiliated with Thrive Waukesha, and I'll certainly post updates here on what is happening with Thrive Waukesha.  In the long term,  Creating Communities may evolve into a blog about creating better communities through better policies, not just in housing, but also other areas as well, particularly disability-related issues.  I hope to recruit guest bloggers to discuss specific issues now and then.

Now go check out Thrive Waukesha!

NIMBYism in Hales Corner

I confess to being surprised to read of opposition to the proposed Applewood Senior Living Center given that neighbors usually consider elderly housing to be more desirable than other forms of multi-family housing.  I recall a public meeting in the City of Waukesha where neighbors opposed to a proposed development near the Goodwill building stated they would prefer to see a senior living building there.

Don't mistake me-I consider senior living apartments to be segregated housing and are opposed to them.

But this reminded me of two items I read recently- Matthew Ygelias writing about NIMBYism over solar panels on utility poles and Kevin Drum chiming in with a story of outraged residents being opposed to cellular transmitters atop light poles.

It was over in a neighborhood called Turtle Rock, which is one of Irvine's most upscale "villages" (yes, we really call them that). I got curious, and since it wasn't far away I drove over to take a look. And I looked and looked. Finally I found the offending light pole and looked some more. And there it was! I didn't see it at first, but sure enough, there was a small round doohickey attached to the pole about 20 feet up.

All I could do was shake my head. It was a light pole! And the transmitter was barely even visible. And it was 20 feet off the ground. How could anyone possibly care? But they did.

Sometimes people simply are opposed to change, period.

That doesn't mean there aren't legitimate concerns that could apply to some developments.  But the trick is to find the real issues among the hysteria.