Dallas-based mortgage servicing firm Nationstar Mortgage Holdings Inc. will provide up to $30 million in mortgage modifications to help financially-strapped Milwaukee residents keep their homes, under a partnership agreement announced today by city officials.
Milwaukee Mayor Tom Barrett and Common Council President Michael Murphy announced the agreement today and said Nationstar and the city would work together on a five-part plan.
Under that plan, Nationstar will provide up to $30 million in mortgage modifications for Nationstar customers in Milwaukee over three years. That is a 57 percent increase in mortgage modifications that were projected for Nationstar’s Milwaukee portfolio.
Nationstar will also provide a $500,000 cash commitment over three years, which the city will use to support critical home repairs through the Strong Homes Loan program.
Nationstar will do three face-to-face foreclosure prevention events with Milwaukee borrowers per year for the next three years.
Nationstar will donate foreclosed properties that it manages in Milwaukee, when possible. The donations will include a cash stipend of up to $10,000 per property.
Nationstar CEO Jay Bray will include city officials in meetings and discussions with federal government-backed lenders such as Fannie Mae and Freddie Mac going forward, to outline and advocate for foreclosure solutions in Milwaukee.
In an attempt to address the foreclosure crisis in the city, Barrett and Murphy began discussions with mortgage servicers, including Nationstar, in January of this year. The city officials said they were concerned that another wave of foreclosures could hit the city and were seeking way to mitigate the number of foreclosures to help preserve homeownership and the city’s tax base.
Nationstar is owned by an investment group co-founded by Wes Edens, one of the primary owners of the Milwaukee Bucks. Nationstar and Edens have been criticized by community group Common Ground, which said that Nationstar manages some of the city’s worst kept foreclosed homes.
Common Ground protested plans to provide public money to pay for half of the cost of a new arena in downtown Milwaukee while a company owned by Edens owned abandoned and deteriorating foreclosed homes in the city.
The announcement of Nationstar’s partnership with the city comes shortly before aldermen are about to review the city’s funding portion of the arena deal. Under that package, approved by the Legislature and signed into law by Gov. Scott Walker, past and current owners of the Bucks will pay for half of the cost of the $500 million arena and the other half will come from a combination of state, city, county and Wisconsin Center District funds. The city’s share, which is subject to Common Council approval, is $47 million, including $35 million for a parking structure.
The city’s funds for the arena will be provided in the form of tax incremental financing. The Common Council’s Steering and Rules Committee will hold a public hearing on the deal during its meeting on Monday, Aug. 31.