Feds may help Manteca buy homes
McNerney vows to help Manteca get share of $3.9B in foreclosure grants
Dennis Wyatt
Managing Editor
President Bush’s signature could put Manteca into the business of buying foreclosed homes.
The far-reaching housing package that breezed through Congress and then sent to Bush that’s designed to shore up mortgage lenders and strengthen the housing market and economy includes $3.9 billion in grants earmarked for local governments to buy and rehabilitate foreclosed properties. The money is being directed to particularly hard hit communities. Manteca since December has been part of the hardest hit region in the nation as the greater Stockton area has been at the top of the foreclosure lists more often than anyone else in month-to-month statistics.
“Foreclosures are a huge problem in our region,” said Congressman Jerry McNerney, D-Pleasanton, who voted for the bill. “Families have lost their homes, homeowners have seen property values nosedive and neighborhoods have become destabilized. The bill we passed this week will help get our economy back on track. One of the important provisions of the bill deals with the neighborhood-wide ripple effect that takes place when a home is foreclosed, driving down other prices in the area, reducing state and local tax revenues and inviting crime.
“The bill provides resources to allow cities and states to buy up and rehabilitate foreclosed properties so that families can move in. I look forward to working with local officials to ensure that some of these funds are directed to Manteca and other cities in the county.”
Assistant City Manager Karen McLaughlin confirmed that the city will be in contact with McNerney’s office and the appropriate federal agencies to make sure Manteca can access all tools at their disposal to deal with the foreclosure mess in Manteca.
Nearly 80 percent of the 460 existing homes for sale currently in Manteca are under duress. There are 175 homes that have been foreclosed on that are up for sale plus 180 short sales – homes that are moving toward foreclosure. Only 105 homes listed are not under duress.
Nearly 90 percent of the 497 homes that have closed escrow inside the city limits since January have been the result of the foreclosure process.
Manteca Mayor Willie Weatherford said he would of preferred to see a program from Washington that would have worked with first-time buyers to purchase foreclosed homes but since the bill (is shaped) in the manner that it is he wants to make sure Manteca can take advantage of it.
Details of how the worst impacted cities can benefit from the $3.9 billion in grants have yet to be released.
It appears the availability of grants works into an expressed commitment by the Manteca City Council made in previous months to direct redevelopment agency resources as much as possible to help people purchase foreclosed homes.
The federal grants may take it a step further as it would make funds available to agencies such as the Manteca RDA to purchase and rehabilitate the worst foreclosed properties and convert them into affordable housing.
It is not clear what strings are attached. The RDA could end up selling the homes to those in the moderate to low moderate household targeted in most affordable housing programs or keep them possibly to rent.
The bulk of the bill, though, allows the Federal Housing Administration to insure up to $300 billion worth of refinanced mortgages
That would allow up to 400,000 struggling families to possibly keep their homes with cheaper rates as long as their lenders volunteer to take losses up front instead of risking going through the foreclosure process. That means more than 1.4 million homes are expected to be taken back by lenders this year.
