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Sales of Orlando Pre Foreclosure Homes Rise with Rule Change

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By : John Cutts    99 or more times read
Sales of Orlando pre foreclosure homes and foreclosed residential properties are expected to surge with the recent change in the rules for spending funds from the federal Neighborhood Stabilization Program.

Previously, the NSP specified that its funds must be spent only for rejuvenating neighborhoods blighted by abandoned foreclosure properties and not for preventing foreclosures from entering the market. NSP argued that the federal government has already launched prevention initiatives.

Now, NSP officials have reviewed their rules and decided to relax a bit to make it easier for cities and counties to spend their allocations. NSP must have wondered why a large number of local governments face difficulties in spending their NSP funds within the allotted time frame.

In Florida, where record numbers of foreclosure filings have been battering county courts, only 12 percent of the $91 million NSP funds received over the past year has been spent, based on data from the federal Housing and Urban Development Department.

The percentage put Florida among the slowest U.S. states in spending their federal funds to revitalize their foreclosure-ridden neighborhoods. Another foreclosure-battered state, California, has already committed 43 percent of the NSP funds it has received.

The HUD also reported that currently, about 33 percent of over 300 counties and cities that received NSP grants over the past year have barely touched their funding to buy, fix and resell foreclosures blighting their communities.

With the change in the NSP spending rules, more Orlando pre foreclosure homes will be sold off or be acquired under the NSP funding program and resold. Now, city officials can use their NSP money to buy not only abandoned foreclosures in Orlando, but also residential properties in default by two months or more on their mortgage loans or properties delinquent by three months or more on their tax payments.

Additionally, NSP funds can also be used to buy a residential property, such as a duplex for sale, that has not been occupied for a long time and whose defects and damages have not been corrected by the seller.

In Orlando, short sales accounted for 8 percent of house sales in January, an increase from the 5-percent share in January 2009. The increase is an indication that both the supply and demand for Orlando pre foreclosure homes are rising. With the relaxed NSP rules, the percentage of short sales in Orlando will surge further in the coming months.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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