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Foreclosed Home Listings in New York Offered with Discounts

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By : John Cutts    99 or more times read
Foreclosed home listings in New York that highlight houses in distressed neighborhoods will soon be offered at deeper discounts of about 20 to 25 percent to hasten the implementation of the city’s Neighborhood Stabilization Program.

This week, New York Mayor Michael Bloomberg and other city officials were criticized for not fulfilling their promise made in 2009 to act quickly and fix vacant foreclosed homes to be sold to lower-income households.

As of last week, the city has purchased only eight vacant homes and has repaired none of them. No house has been resold.

One of the reasons given was the refusal of banks to sell their foreclosure properties at 20-percent discount – the discount level that makes the program viable. The banks held their ground at 15 percent and refused to cut down further the prices.

But according to Heather Lawler, community development officer at the Local Initiatives Support Corp., banks may soon approve the deeper discounts as they realize the continued foreclosure of properties.

In 2009, more than 20,000 homes in New York City got notified of default and foreclosure, almost two times the 10,177 foreclosure postings in 2006.

The number of foreclosures taken by banks from auctions because they failed to sell also increased. In 2006, only 290 properties were in their foreclosed home listings. In 2008, the number soared to 1,830 units, according to the New York University Furman Center for Real Estate and Urban Policy.

Under the NSP program, the money would be used to acquire and rehabilitate houses in neighborhoods hardest hit by foreclosures, such as Brooklyn, Bedford-Stuyvesant and Queens.

With the release of another $32 million from private sources to match the federal funding, housing and nonprofit officials hope they can now begin buying vacant Bronx foreclosed homes for sale and other properties in disrepair.

Another trouble for the city to solve and another sign that the city needs to hasten its housing programs is the foreclosure of the historic apartment complex Riverton Houses in Harlem. The complex, constructed in the 1940s with 1,232 apartment units, was mortgaged for $225 million, and now it is doubtful if the lenders can recoup their investment as the complex was assessed at only $108 million in September last year.

The Riverton foreclosure followed the recent surrender of the $5.4-billion Stuyvesant Town apartment complexes to the lenders and showed the continued severity of the problem of foreclosed home listings in the city.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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