| Blight fight: New programs deal with vacant foreclosures
The foreclosure crisis, which has caused around 4 million people to lose their homes, has wreaked havoc on many neighborhoods. The Department of Housing and Urban Development administers the fund, which has received $7 billion in appropriations so far, Sisk says. "Over time, servicers have adjusted their models to accommodate selling properties swiftly rather than holding onto potentially wasting assets," the 2010 Federal Reserve report on neighborhood stabilization says. Bank of America has launched a similar pilot program, called the "Mortgage to Lease Program," that forgives the outstanding debt of some homeowners headed toward foreclosure and offers them the opportunity to rent their houses from Bank of America in exchange for handing over the titles to the bank. By mandating that the properties be converted into rentals, the program aims to lower rents where foreclosures have hiked up rates and deliver the homes with caretakers who are motivated to maintain them, namely, the investors themselves. For nonprofits, the Neighborhood Stabilization Program plays a key role in rehabilitation efforts, furnishing them with the necessary funds to invest in mass-scale neighborhood revitalization, which often takes the form of REO rehabilitation. And there are "many different structures" to use to attain this. They've appeared to bolster their efforts in recent months in order "to figure out how to move upstream," says Ascala Sisk, senior manager of Stabilization Strategies at NeighborWorks. The program has its critics, including the National Association of Realtors. NeighborWorks America, which coordinates with affiliates that were awarded more than a total of $500 million from the $7 billion Neighborhood Stabilization Program fund in 2010, is teaming up with local affiliates of the nonprofit Rebuilding Together to train the groups to rehabilitate vacant foreclosed homes and sell them to low-income Americans. The National Community Stabilization Trust, which was created in 2008 to facilitate the transfer of bank-owned homes to nonprofits, will work with the two groups to identify homes which will receive repairs under the program. NeighborWorks America affiliates across the country helped homeowners rehabilitate more than 8,700 homes and 43,000 rental homes in 2011, group spokesperson Douglas Robinson says. Rebuilding Together's plan is to rehabilitate REOs and sell them to community memberswho make between 80 and 120 percent of the local median income, and also provide them with homeownership education, Walker says. For all of the two programs' possible shortcomings, they reflect a growing interest across the real estate industry in finding innovative ways of ameliorating the housing crisis by attending to the REO threat, Sisk says.
The foreclosure scourge is especially acute in minority neighborhoods, according to a recent report by the National Fair Housing Alliance, which found that banks take much better care of their foreclosed properties in predominantly white neighborhoods than those in minority communities. Coinciding with the two nonprofits' newly formed partnership is another program launched in February that takes an alternative approach to combating REO blight. Since the partnership has just formed, Rebuilding Together says that it cannot provide an estimate of how many homes the program will impact. "If this evolves from a pilot into a more broadly based program, we also see potential benefits from helping to stabilize housing prices in the surrounding community and curtailing neighborhood blight by keeping a portion of distressed properties off the market," Ron Sturzenegger, a servicing executive of Bank of America, said in a statement. |
Tuesday, 1 May 2012
Blight fight: New programs deal with vacant foreclosures
