Orlando, FOL – October 14, 2009 – (RealEstateRama) — Congressman Alan Grayson, U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan, and Mayor Buddy Dyer toured a neighborhood and highlighted two successful programs helping resolve the problems of foreclosure and slumping property values today in Orlando.
Congressman Grayson said, “A home is not only a roof over your head. It creates jobs for plumbers, carpenters and real estate agents; it’s an investment and a savings account; and a paid-off mortgage means security for senior citizens. That’s why we are trying to so hard to revive housing in Central Florida.”
The group toured a foreclosed house that is being rehabilitated through the Neighborhood Stabilization Program. The City of Orlando bought the house for $125,000, using NSP funds from HUD. The City will spend another $20,000 on repairs and renovation. The City expects to sell the house for $145,000. The increased sale price will help boost property values of nearby houses.
“We have a lot more to do for American families – particularly here in Florida, which is ground zero when it comes to the foreclosure crisis,” said HUD Secretary Donovan. “In addtion to providing much needed relief to families facing foreclosure through the Making Home Affordable program and helping to stabilize home prices through the Neighborhood Stabilization Program, we need Congress to pass the President’s plan to modernize our financial system and create a Consumer Financial Protection Agency that will protect American families who buy financial products and services every day – from mortgages to credit cards.”
Orlando homeowner Juanita Roberts also joined the tour. She is among the more than 500,000 American families who have taken advantage of the Obama Administration’s Making Home Affordable program. Roberts was two months behind on her mortgage. The program enabled her to modify her mortgage and, as a result, her monthly payment dropped by about 60 percent.
“For every government program, the only test that matters is what it does to improve the lives of ordinary people. That’s why these HUD programs are so important — they help keep families in their homes, they stave off foreclosures, they help make home ownership affordable, and they provide shelter to people who cannot afford a home. These programs are a helping hand, held out to some of the neediest, most vulnerable people in America,” said Congressman Grayson.
The Neighborhood Stabilization Program, which was originally created under the Housing and Economic Recovery Act (HERA) of 2008, provided $3.92B for the acquisition and rehabilitation of vacant, foreclosed homes that have been taken into possession by mortgage lenders. Homes are then resold at affordable levels (no more than 120 percent of Area Median Income, with 25 percent restricted to even lower incomes) to pre-counseled homebuyers. The program aims to mitigate the effects of vacant, foreclosed homes on the surrounding neighborhoods where they exist, and is targeted to communities with high concentrations of high-cost lending and foreclosures. The second round of NSP, which received $2B under the American Recovery and Reinvestment Act (ARRA) of 2009, will be allocated through a competition that considers capacity and innovation as a key requirement for making awards.
Making Home Affordable, a comprehensive plan to stabilize the U.S. housing market, was first announced by the Administration on February 18. The three part program includes aggressive measures to support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac; a Home Affordable Refinance Program to provide new access to refinancing for up to 4 to 5 million homeowners; and a Home Affordable Modification Program to reduce monthly mortgage payments for up to 3 to 4 million at-risk homeowners. Last week, Secretary Donovan and Treasury Secretary Timothy Geithner announced that over 500,000 families had modified their mortgages through the Making Home Affordable Program.
Background on Juanita Roberts: She came to the Consumer Credit Counseling Service of Greater Atlanta, Inc. office in Orlando, FL on August 14, 2009, when she was two months delinquent on her mortgage with CitiMortgage. The mortgage was a conventional loan with an interest rate of 6.875%. She purchased the home in 2007 and the monthly mortgage payment was $1,644.00.
At the time the home was purchased Juanita’s daughter lived with her and was providing financial assistance. Juanita’s daughter later relocated to the Bahamas and was unable to provide the same level of financial assistance, which left Juanita unable to afford her mortgage. Juanita contacted her lender and was unsuccessful at lowering her payment, her lender then advised her to contact CCCS.
CCCS helped Juanita to lower her mortgage through a trial modification plan and her payments have been lowered to $653.49.