City Programs to Address Effects of Bank Foreclosure for Sale

by Peter Vernon on cities

The foreclosure crisis has ruined thousands of lives. And not just that of distressed homeowners but also residents of neighborhoods where bank foreclosure for sale properties are located. The situation in the city of Newark in New Jersey is not different from other cities and towns ravaged by foreclosures.

Seymour Avenue, which used to have the highest homeownership rate in the city, is now deteriorating due to the increasing number of foreclosed properties in the area. Since 2005, about 60 homes have been abandoned and left vacant by their delinquent owners.

According to Rutgers University’s Edward J. Bloustein School of Planning and Public Policy’s Urban Planning and Policy Development assistant professor Kathe Newman, Seymour Avenue is probably the best example of what foreclosure can do to an area.

Communities like Seymour Avenue are some of the areas that city officials are trying to save. Newark’s homeownership rate is 23 percent and foreclosure has been causing instability in some of the city’s neighborhoods with high homeownership rates, including Vailsburg and Clinton Hill.

City officials have launched a program to allow nonprofit organizations in affected areas to purchase, rehabilitate and resell bank foreclosure for sale. The $3.4 million program is funded under the Housing and Economic Recovery Act.

The city will also provide homeownership classes to new owners. It also plans to compete for a share in the $2 billion from the Obama Administration’s $787 billion economic stimulus program that will be allocated by the U.S. Department of Housing and Urban Development to expand housing stabilization programs and help surrounding municipalities.

Meanwhile, the city has launched a series of events designed to educate homeowners to avoid homeowner assistance scams. It also organized events that allow lenders and distressed homeowners to find ways to help the latter keep their accounts current and remain in their homes.

Last March, some residents went around Newark to tear down over 700 signs that city officials said were posted by scammers searching for troubled homeowners to victimize. Newman praised the city’s efforts to build relationship and eliminate foreclosure rescue scams.