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A little state's big struggle with the foreclosure crisis
comments (0) January 30th, 2009 in Blogs
Richard Defendorf, contributor
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As we keep saying, taming the foreclosure crisis is – or should be – among the government’s top priorities at the moment. And in fact the federal government has authorized financial aid for states trying to reckon with high foreclosure rates.
The problem, at least at the moment, is that the financial allotments aren’t big enough to adequately address the foreclosure problems in many states.
A recent CNNMoney.com story cites a case in point: Rhode Island’s struggle to make the most of $19.6 million it received as part of the $3.92 billion Neighborhood Stabilization Program passed by Congress last year. The program goal – to help pay for the acquisition and redevelopment of foreclosed properties into affordable homes for rent or purchase – is relatively simple, but its implementation is not.
The Mortgage Bankers Association says 3.18% of home loans in Rhode Island were in foreclosure at the end of the third quarter. That’s about 4,460 homes – the 10th-worst foreclosure ranking in the nation.
Even though the Obama administration’s new stimulus plan may soon provide more financial help, Rhode Island officials are nonetheless faced with the complicated (and, in many cases, politically sensitive) task of deciding which projects to fund. They also must follow Department of Housing and Urban Development rules in the process.
So far, CNNMoney notes, state officials have pretty much hewed to the program mandate by giving priority to projects that benefit neighborhoods already being revitalized, help potential homebuyers reoccupy vacant houses, and expand the pool of affordable rentals. It's a challenging way to spend $20 million, but in this economy it's better than no help at all.
posted in: Blogs, business
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