Los Angeles Foreclosures to be Fixed With Record $160M Grant

by Donald Hanz on cities

A big number of Los Angeles foreclosures will be fixed with the $100 million received by the city from the second Neighborhood Stabilization Program funding round of the U.S. Department of Housing and Urban Development.

Los Angeles got the highest amount among all other cities that received allocations. In addition to the $100 million it received, the consortium Los Angeles Neighborhood Housing Services was also granted with another $60 million to be spent for housing rehabilitation in the city, including buying and repairing fixer uppers for lower income families.

California was second among states in the amount of grants received. It was given a total of $318.05 million. Florida got the highest amount – $348.31 million.

The other California cities that received assistance were Modesto, which got $25 million; Long Beach, which was given $22.25 million; Santa Ana, which got $10 million; and Indio, which received $8.31 million.

The consortium Chicanos Por La Causa, which is operating in several states, got $30.8 million to fund its community projects in California. For its nationwide programs, it was given a total of $137.11 million. CPLC was launched by community advocates of Mexican descent in the 1970s.

According to LA Mayor Antonio Villaraigosa, the grant was great news for residents of the city. He said the money will be used to acquire and rehabilitate Los Angeles foreclosures and turn them into good but cheap houses for working class households.

Since 2007, more than 30,000 homes in the city have been foreclosed. In November last year, the percentage of foreclosure postings in the Los Angeles-Glendale-Long Beach area rose to 3.77 percent of outstanding home loans, higher than the nationwide rate of 3.1 percent.

Mortgage defaults also increased in the Los Angeles metro area in November, with 11.4 percent of all homeowners with mortgage loans in default by at least three months. The rate marked a jump of 6.3 percent from the November 2008 default rate.

In December, foreclosures slowed down in California as major lenders suspended their filings to allow homeowners to enjoy the holidays. Default notices fell by 17.5 percent during the month and dropped daily at an average of 32.5 percent. Foreclosure sale cancellations also increased daily at an average rate of 3.5 percent.

However, housing analysts said that the pace of Los Angeles foreclosures and foreclosure activity in other parts of California will step up in 2010 as job losses continue to increase.