When the President came to California yesterday and announced that the state will receive $145 million to help communities hard-hit by the foreclosure crisis, I thought to myself, “$145 million? That’s pocket change.” I realized then, that with all the stimulus packages, and budgets plans, and financial talk that have been spattered about the news like a massive Pollock painting in the last few months, my perception of the actual worth of $145 million dollars had been greatly skewed. $145 million can go a long way, can’t it?
The funds, as the President said on Thursday, “will be used to purchase and rehabilitate vacant, foreclosed homes and resell them with affordable mortgages.” He goes on to add that the funds “will also provide mortgage assistance and rehabilitation loans for low-income and middle income families.” The program that generated these funds, “was created as part of the Housing and Economic Recovery Act of 2008, which permits state and local governments to purchase foreclosed homes at a discount and rehabilitate or redevelop them”, reports the Associated Press. “Additionally, funds will come from the massive stimulus package.” Who knows how much additional funding from the stimulus package will actually go towards California’s foreclosure problem, and who knows how far this money can go to do all the things that the program is intended to do.
After-all, according to the RealtyTrac research firm, there were filings for 80,775 foreclosures on California properties in February. Oooooowweeeee, that’s a fair bit of foreclosures. How much money are we getting again? Of course, that number is slightly skewed due to the foreclosure moratorium that took place starting at the end of November and ended towards the end of January. For those unaware, the moratorium basically just halted the foreclosure process for that time period in an effort to keep people in their homes during the holiday season. So during that time, the amount of foreclosure filings piled up. But now that it’s over, we’ve got a lot to deal with. It would be interesting to get a number on the average dollar amount that will be spent per foreclosure with this money and see how big of dent the $145 million can actually make.
But I don’t mean to sound like Debbie Downer. $145 million is a fair bit of money. And hopefully a nice chunk of the money that California gets from the stimulus package will help as well. And moreover, this money will certainly help rejuvenate some neighborhoods in the state, and any bit of progress that can be made to lessen the enormity of this foreclosure crisis is a damn good thing.
By Andrew Brentan
Eric Elegado Update