At least four of the largest national lenders in the country have committed to give Twin Cities officials first choice of foreclosed properties in Minneapolis and Saint Paul to help facilitate Twin Cities’ efforts to rehabilitate neighborhoods. The Twin Cities will in turn offer these chosen foreclosed properties to major nonprofit developers which have existing rebuilding projects or neighborhood rehabilitation plans.
This Twin Cities first-look program will be the model for a nationwide program projected to expand to other cities such as New York and Cleveland. It will be organized by Dayton’s Bluff Neighborhood Housing Services in Saint Paul and the Greater Metropolitan Housing Corp. in Minneapolis.
Greater Metropolitan’s president Carolyn Olson said that the two housing organizations have already identified over 200 foreclosed properties. She also said that Minnesota is considering a proposal to spend some of the city’s share in the federal housing recovery funds for subsidizing the difference between the purchase cost of a house and its market value in a downturn.
In Minneapolis, the program will focus on foreclosure properties in northeast Minneapolis, the North Side and the neighborhoods of Phillips and Powderhorn. In Saint Paul, the program will focus on properties in the Invest Saint Paul area.
Twin Cities leaders said that the first-choice program is being piloted in Minneapolis and Saint Paul because the two cities have been implementing foreclosure programs way ahead of other cities in the country. They have been using nonprofit funds and state and city money to purchase select foreclosure properties as part of bigger rebuilding projects and neighborhood rehabilitation programs.
The four national nonprofit organizations which have launched the pilot program have created the National Community Stabilization Trust to focus on the program. Among the mortgage lenders who will provide the foreclosed properties are JPMorgan Chase, Fannie Mae, CitiGroup and Wells Fargo.
Leticia Carvalho has been educated in the finer points of the foreclosure market over 5 years.