- Image via Wikipedia
Today, the U.S. Department of Housing and Urban Development (HUD) announced an agreement with top mortgage lenders to offer local governments and nonprofits the chance to buy foreclosed homes before they are made available to private investors.
HUD Secretary, Shaun Donovan states:
“This groundbreaking agreement will help rebuild neighborhoods that have been struggling with blight and declining home values due to foreclosures. Local communities will now get an exclusive option to buy foreclosed properties in targeted neighborhoods so they can turn the homes into affordable housing or, in some cases, tear them down. This agreement helps us level the playing field to give communities a better chance to stabilize these neighborhoods.”
Lenders participating in the National First Look Program include Ocwen Financial Corp., Bank of America, Chase, Citi, Deutsche Bank, GMAC, Nationstar Mortgage, Saxon Mortgage Services, U.S. Bank, Wells Fargo, Fannie Mae, Freddie Mac, and the Federal Housing Administration.
According to HUD, the above lenders represent about 75% of bank-owned properties.
The agency said state and local governments and nonprofit organizations often have to compete with investors for foreclosed homes. That hinders efforts to stabilize neighborhoods hit hard by foreclosure. Under this program, these governments and nonprofits will be notified when a property becomes available and will have one to two days to express interest in buying the home.
Todays’s announcement comes on the same day as the Federal Reserve begins a national summit to address the impact of foreclosures on neighborhoods.
