Rise in Bank REO Properties Intensifies Recovery Efforts
The federal and local government are intensifying their housing recovery efforts and launching new ones to contain the flood of mortgage delinquencies and bank REO properties in Seattle, Washington.
The U.S. Department of Housing and Urban Development (HUD) hosted a party in Seattle during the Recovery Act in Action Week. Some of the party highlights included HUD Secretary Shaun Donovan’s broadcast message, networking, webinars and technical assistance for recovery programs.
Currently, the HUD is providing a total of $3.47 billion in competitive grants for Native American and public housing, green retrofitting for federally-assisted houses and neighborhood stabilization projects.
Last February, the HUD allocated about $10.1 billion Recovery Act funds, with $168.6 million received by Washington.
HUD’s Office of Field Policy and Management deputy director Dave Ziaya said that Seattle could apply for the competitive grants which are set up not just for neighborhood stabilization and bank REO properties prevention programs.
HUD deputy regional director Martha Dits said that there are many agencies in Seattle that could seek funding, adding that there is a lot of interest and enthusiasm on the recovery funds.
Brookings Institute’s Metropolitan Policy Program Vice President Bruce Katz noted that the recovery grants are motivating counties and cities to work together and with private partners. He added that parties involved have recognized the links between energy, housing and transit.
Meanwhile, the government-controlled mortgage company Federal Home Loan Mortgage Corp. or Freddie Mac has announced that it would ease loan refinancing rules to help more homeowners avoid bank REO properties.
Freddie Mac will allow borrowers of loans guaranteed by the agency or who are current on their mortgages to refinance their troubled loans through any affiliated lenders. Currently, troubled loans are only refinanced through lenders who gave out the mortgages.
The program is part of the Home Affordable Refinance plan, under the Making Home Affordable program of the Obama Administration.
The refinancing program allows renewed financing at low interest rates for as many as 5 million borrowers who have good mortgage payment histories on loans guaranteed by Freddie Mac or its sister company, the Federal National Mortgage Association.
Last April, filings of foreclosures were made on 52.8 percent homeowners daily, an increase from the 24.5 percent for the same period last year. In Snohomish and King counties, 0.7 percent of properties were in danger of becoming bank REO properties and 2.3 percent mortgages were delinquent for at least 90 days.
By Cassiano Travareli