New York City is taking a novel approach to addressing enduring pockets of the home foreclosure crisis by buying long-unpaid mortgages, with plans to help owners stay in their homes if possible or use the properties as affordable housing if not, officials say.
It’s among the first cities to pursue buying such loans directly from the federal Department of Housing and Urban Development. If HUD can make it easier for investors to purchase troubled mortgages, housing advocates and some lawmakers are pressing the agency, why not cities and nonprofit groups?
New York announced the $13-million program Thursday. So far, it involves just 24 properties, containing a total of 41 homes and apartments. Officials say the cost includes millions in reserve for repairs, although that money may not be required, and they cast the program as an experiment they hope to expand.
“It puts government squarely on the side of struggling families, so they can keep their homes,” Mayor Bill de Blasio said in a statement.
The wave of foreclosures that accompanied the 2008 mortgage meltdown peaked several years ago, but some neighborhoods still have concentrations of homes in trouble, city officials say. Nearly 34,000 residential and commercial properties citywide were in some stage of the foreclosure or were bank-owned as of last month, according to statistics by RealtyTrac.