March 15, 2016
A bill backed by the banking industry that would make it more difficult for communities to get rid of abandoned homes is poised for final approval Tuesday by the GOP-controlled state Senate.
The measure, Assembly Bill 720, was introduced by Republican Rep. Terry Katsma, of Oostburg, a former banker, and Sen. Frank Lasee, of De Pere, and approved earlier by the Assembly. With Senate approval, it would go to the governor.
Current law, which was upheld by a 2015 Wisconsin Supreme Court decision, requires lenders to sell foreclosed, abandoned properties, which are often referred to as “zombie homes,” after a five-week period during which the homeowner can pay the mortgage in order to keep it. The Supreme Court ruled that when a court declares a foreclosed property to be abandoned, the lender must try to sell it.
Under AB720, lenders would have a year to decide whether to sell the property or let the original owners keep it even if the original owners abandoned the property after the foreclosure process began and no longer think they own it. A property’s title is kept by the homeowner until the foreclosure process is finished and the property is sold by the lender.
Zombie homes have proliferated since the 2008 mortgage crisis, especially in larger communities like Milwaukee, which have an interest in getting rid of them because abandoned properties become the targets of vandals, hurt neighborhood property values, or are used by drug users or other criminals.
Overall, the banking and finance industry has contributed about $829,600 between January 2011 and December 2015 to Republicans who control the Senate by a 19-14 margin, and about $642,100 to GOP lawmakers who control the Assembly by a 63-36 margin.
Bankers and financiers were Katsma’s No. 1 special interest contributors, giving him nearly $8,000 from January 2014 – the year he was elected – through December 2015. Among Katsma’s largest contributors in the banking industry are three political action committees (PACs) which gave him $500 each. Those PACs are controlled by BMO Harris Bank, the Community Bankers of Wisconsin, and the Wisconsin Bankers Association, which is backing Katsma’s bill.
The banking and finance industry gave Lasee, who was elected to the Senate in 2010, about $16,000 between January 2011 and December 2015. Lasee’s top contributors in the banking industry include $1,000 each from PACs controlled by the Community Bankers of Wisconsin and J.P. Morgan Chase, and $825 from John Slatky, of Luxemburg, president of the Bank of Luxemburg.