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Foreclosed homes in Connecticut
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The Connecticut Post ran this article on March 17, 2009 that describes the steps the City of Bridgeport is taking to fill bank owned/foreclosed homes.

City to broker foreclosed homes

 

By Rob Varnon
STAFF WRITER Updated: 03/17/2009 11:07:41 PM EDT

 

BRIDGEPORT -- Mayor Bill Finch unveiled a $25 million program Tuesday that within a month could begin to put families into 200 foreclosed and abandoned properties in the city.

"The first loans will go out in two weeks," Finch pledged at a news conference in front of a foreclosed home at 72 Sidney St. He was there to announce the launch of Bridgeport's "Neighborhood Stabilization Program Funding," accompanied by state officials and several employees of nonprofits.

The program will leverage $6 million in federal funding to create a $25 million lending pool to provide mortgages to qualified borrowers buying properties in foreclosure.

The house Finch spoke in front of has been vacant for about six months, according to a neighbor, Janice Vizzo. The people who lived there bought the house several years ago and made improvements before having to give it up, she said.

"With this economy, I'm not too surprised," she said, by the foreclosures on her street. "It's sad."

Vizzo said she would like to see banks work with struggling homeowners because taxes are rising and people are finding it hard to make ends meet. She had hoped Finch would be announcing a program to help people stay in their homes.

That, however, is not what the stabilization program will do. It was created by Congress last July to deal with a glut of empty homes on the market.

Bridgeport's neighborhoods have been staggered by waves of home foreclosures that began in 2007 as adjustable rate mortgages reset to higher rates. Compounding the problem was the economy's downward slide and increasing job losses, making the high-priced mortgages unaffordable.

Connecticut received $25 million of the $13.9 billion program Congress authorized last July.

"There are parts of our country where entire neighborhoods are vacant," Julie Fagan, U.S. Department of Housing and Urban Development Connecticut office director, said at the news conference.

There will be plenty of work to do in the city, she said.

"Hundreds of households in Bridgeport were victims of predatory lending," Fagan said.

Finch lauded state Department of Economic and Community Development Commissioner Joan McDonald for getting Bridgeport the biggest chunk of the $25 million allocated to the state.

McDonald said the money's distribution was based on data about the foreclosure crisis, and Bridgeport's statistics were the roughest.

"We are in this together and we are in this for the long haul," she said.

For the program to work, there will have to be cooperation between banks, nonprofit agencies, and federal, state and local organizations.

The program will rely on the National Community Stabilization Trust, a group of four nonprofit groups, including the Enterprise Community Partners and the Local Initiatives Support Corp., to negotiate with banks for bulk, discounted sales of foreclosed properties.

The NCST will offer a list of available foreclosed properties for sale at a discount of at least a 15 percent below the appraised value.

The city's program will educate new buyers and provide loans for those homes. Some of the money can be used to demolish uninhabitable structures and clean up lots. The city will also have to provide staff to inspect the homes and get appraisals.

The city's program will be administered by the Housing Development Fund, which will help leverage the money into a bigger pool, the city's housing development office and other organizations.

HDF has opened an office at 940 Broad St., and is starting classes to qualify people to buy homes through the program.

Bridgeport's foreclosure woes As of March 17, according to RealtyTrac.com n 226 bank-owned properties n 69 homes being auctioned n 504 properties in default n For information on the Bridgeport Neighborhood Stabilization Program, call 338-9035 or visit www.hdf-ct.org

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