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Efforts to Shorten Foreclosure List in Gresham City Underway

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By : John Cutts    99 or more times read
In an effort to address foreclosure list problems in the city, the local council of Gresham in Oregon has decided to up the amount of interest-less loans being offered to local residents who plan on buying foreclosed homes.

According to local reports, loans reserved for purchasing foreclosed properties were increased to $25,000 from the initial $10,000. The money being used by the city for these loans were part of the federal government’s Neighborhood Stabilization Program which aims to solve the problem of foreclosed properties being left empty and creating unsecure neighborhoods that can contribute to bringing the values of properties down.

Gresham City received a stimulus package worth $645,329 from the federal government to be used in loans specifically designed to buy foreclosed homes. As of the end of March 2010, the city still has $430,000 in its purse available for lending to low income local residents.

Approximately, the amount can still provide for more than 40 foreclosed home purchases. The problem currently facing the city’s efforts to shorten the area’s foreclosure list is that, so far, it has only made a total number of six loans. Under the program’s rule, the federal money should be spent no later than September 29.

In addition, the city has around 80 foreclosed residential properties, but only less than 20 are located in target areas as defined by federal officials. The areas were identified using data on subprime loans from 2007 and other factors that contribute to foreclosures.

Local officials have stated that they have filed a request to expand target areas, but they do not expect an answer until May. To address this aspect of the problem, the city has decided to increase the loan amount to attract more borrowers and potential foreclosed property buyers.

Under the lending program, properties qualify if they have a maximum selling price of one percent of the property’s appraised value. In addition, the sale should be a voluntary one. In terms of buyer requirements, families or households should have incomes that are 120% of the metro area’s median income or not over $84,000.

The loans have no interest and borrowers do not have to pay for these loans until their mortgage has been refinanced or until title transfer has been completed. City officials admitted that they are still looking at other ways to spend the federal money and maximize its use in solving foreclosure list problems in the city.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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