Charlotte County Rehabs Its Homes for Sale Foreclosures

by Donald Hanz on Foreclosures

The county of Charlotte in Florida has been buying and fixing a number of vacant homes for sale foreclosures in the area to prevent them from dragging down the values of well-maintained homes and from damaging the economy of entire communities.

With $6.7 million in funding from the federal Neighborhood Stabilization Program, the county plans to buy vacant foreclosed properties and then give them for free to local affordable housing nonprofits like the Habitat for Humanity.

Since the start of the NSP program in the county, six homes located in Punta Gorda, Port Charlotte and Englewood have been acquired. According to county housing director Bob Hebert, a number of vacant foreclosures have been occupied by drug dealers because they know the properties have not been visited by the banks that repossessed the homes.

Over the first two months this year, about 240 foreclosures were posted per month in Charlotte County, a drop from filings in 2009, but still relatively high for a county like Charlotte. County officials said that once a block of foreclosure properties are purchased by investors, it becomes difficult for the county to track owners and enforce maintenance regulations.

It is more advantageous for the county to buy homes for sale foreclosures and then resell them to people that will really live in the properties and maintain them. A number of investors with plenty of capital just keep on buying properties without maintaining or actively reselling the foreclosures. Their investment strategy is to wait for prices to recover and resell at a profit.

In Punta Gorda, the administrative seat of Charlotte County and a major city in the Bradenton-Sarasota metro area, the rate of FHA mortgage loans in default has soared to 22.7 percent, the highest rate among all U.S. cities.

Local analysts explained that job losses in the construction sector are a major driver of foreclosures in Charlotte and in other parts of Florida, in addition to condo overbuilding and the staggering fall in home values.

In the Bradenton-Sarasota metro area, 5.3 percent of all homes were hit with foreclosure postings in 2009, equivalent to more than 21,000 housing units.

All in all, about 30 to 40 homes for sale foreclosures in Charlotte County are expected to be acquired by September and are expected to spur construction jobs in the area and at the same time provide affordable housing and rental units to lower-income households.