Washington to Ask for Funds to Stem Bank Owned Homes Sale

by Peter Vernon on Foreclosure Crisis

Six jurisdictions in the Washington region and the Metropolitan Council of Governments are applying for federal funds that will help stem the tide of bank owned homes sale in the area. The funds are under the Obama Administration’s Neighborhood Stabilization Program aimed at helping neighborhoods across the country severely affected by the foreclosure crisis.

The state and local governments said that about 60 target areas would most likely benefit from the federal grant. Council of Governments’ community planning and services director Paul DesJardin explained that the group is targeting neighborhoods within the region that most needed the funds.

He said that some areas are improving in terms of bank owned homes sale rate, but other neighborhoods are still struggling, He cited current foreclosure numbers of 121 in Manassas and 343 in Woodbridge.

Areas that joined the request for a portion of the $2 billion funds are Prince William County, Fairfax County, Gaithersburg, Prince George’s County and Alexandria. Under the program, the minimum grant request should not be less than $5 million and at least 100 bank owned homes sale should be reverted back to productive use or prevent them from becoming blights in neighborhoods. The group is planning to apply for around $25 million funds.

Meanwhile, Prince William County’s Department of Housing and Community Development director Elijah Johnson said that the threshold of $5 million makes it hard for individual areas to apply for federal funding. He said that the main goal of the region’s programs is to have people occupy the abandoned and vacant foreclosed houses.

Recent foreclosure data in the region showed mixed results for counties that are involved in the program. For the first half of this year, the number of foreclosure properties in Loudoun, Fairfax, Prince William and Manassas declined compared with the same period last year.

On the other hand, an increase in foreclosure rates was reported in the counties of Montgomery, Alexandria, Prince George’s and Arlington.

According to industry expert, the unabated increase in unemployment is the major factor driving the number of bank owed homes sale in the region, followed by a significant increase in the number of homeowners who owed more on their mortgage than the total value of their properties.