Acknowledging that its housing relief rescue mission has been slow to respond to the foreclosure crisis, the government is expanding its efforts “to more effectively combat the ongoing effects of the housing crisis.”
A new initiative announced by Housing and Urban Development (HUD) Secretary Shaun Donovan seeks to find more ways that help local communities that have been devastated by the foreclosure crisis. Plans call for funds awarded through the Neighborhood Stabilization Program to be re-directed to areas of the country hardest hit by the crisis as an expansion of efforts. HUD has already directed $6-billion in grants to local communities to aid in the growing foreclosure crisis.
“We want to refocus our financial system on financing growth and innovative companies,” Treasury Secretary Tim Geithner said in remarks given to a crowd on a visit to the Port of Tacoma near Seattle Tuesday, “away from feeding excess in real estate and predatory lending.”
The White House plans to work with members of Congress on new foreclosure prevention efforts to help homeowners facing foreclosure. “Through HUD’s recapture process, the Administration is working to use the resources we have already received … ideally with additional funding for a third round to really target the recovery in hard hit areas directly,” said Donovan, the head of HUD.
“The recapture process would provide additional resources to areas based on their foreclosure and delinquency rates, vacancy problems and unemployment. We also want to go a step further by providing funds to help homeowners avoid foreclosure.”
Grants provided through the housing relief program to local governments and agencies are acquiring vacant land, demolishing and rehabilitating abandoned homes and providing down payments and closing costs to low and middle income home buyers.
Those getting the grants, including non-profits and local relief agencies are also forming land banks to assemble and manage foreclosed properties. More than 63,000 homes are projected to be effected by the program, including the demolition of homes, purchase of properties and acquisition of newly built homes. More than 17,000 properties have already been completed, according to government officials.
The re-direction of funds is intended to aid areas of the country suffering the most from the foreclosure crisis like Detroit, Michigan, where 10,000 homes will de destroyed over the next three years with funds from the program. Other areas being targeted for funding include neighborhoods in Los Angeles, Chicago and Miami among others.