El Paso is eligible and will apply for more than $3 million from the U.S. Department of Housing and Urban Development for a Neighborhood Stabilization Program in areas of the city where home foreclosures and sub-prime mortgages home equity loans are most prevalent.
Citing federal data, the city’s director of Community and Human Development, Bill Lilly, said the mortgage foreclosure rate is greatest on the East Side while the highest risk of foreclosures because of high-interest home equity loans is in South El Paso.
Lilly told City Council members Tuesday that the city has until December 1 to complete its plan for the funds and 18 months to obligate them.
Citywide, he said, there are about 400 foreclosures a month, proving that El Paso is not immune to the nationwide foreclosure crisis.
About half of those foreclosures are on the East Side where the number of sub-prime mortgages is “huge,” compared with 20 percent in the Northeast.
Still, he said, the number of sub-prime mortgages is “huge” on the fast-growing East Side, far greater than any other part of the city.
Though the rate in El Paso is high in historical terms, it is far lower than many other cities.
“I was extremely surprised that we got an allocation,” Lilly said, noting that the estimated 4,800 foreclosures for the year in El Paso compares with 60,000 in Phoenix.
City Manager Joyce Wilson added, “We’re probably one of the lowest in the country” when it come to foreclosure rates.
Lilly said the federal funds will be used for:
-- Acquisition and rehabilitation of an estimated 27 mortgage foreclosed homes at a cost of $732,300 that will be sold at a discount to families making less than 120 percent of the area median income, which works out to $52,320 for a family of four. The city expects to spend $160,000 on rehabilitation.
-- Acquisition and rehabilitation or redevelopment of an estimated 12 abandoned or tax foreclosed homes at a cost of $83,265 that will then be sold at a discount to families making up to 50 percent of the area median income, or $21,800 for a family of four. They will receive home ownership assistance.
-- Demolition of about 10 blighted structures at a cost of $105,000. Those properties may be redeveloped. The city will spend $1 million on redevelopment.
-- Homebuyer assistance in acquiring 19 homes at a cost of $636,900.
-- Administration of the program at a cost of $300,000.
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To reach David Crowder, call dcrowder@epmediagroup.com or call (915) 351-0605
Saul
November 19, 2008
If we're getting 400 foreclosures a month and we're going to use government funds to purchase and resell 39 homes, is this really a good use of government (tax payer) money? Sounds like more bad decisions by people in our federal government, compounded by poor admisitration at the local level.
Ken G
November 19, 2008
It should be a buyers market for foreclosures but beware of sharks who have already bought them. It may be the same agents looking to make a second commission.
LisaT
November 22, 2008
But. But. The Times and the real estate people were saying we didn't have this problem. Yet we here at Council that 400 homes a month are going into foreclosure. Someone is deliberately lying to the Public here.