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The U.S. Housing and Urban Development Department is working with the nation’s top mortgage lenders to offer select state and local governments and nonprofit organizations a “first look,” or right of first refusal, to purchase foreclosed homes before making these properties available to private investors.
HUD didn’t identify which government and nonprofit agencies would be selected to participate, but Florida is a likely candidate because of the extent of already record foreclosure numbers here. Groups that are part of HUD’s current Neighborhood Stabilization Program, which includes Tampa Bay, are eligible to take part.
Participating institutions include Bank of America, Chase, Citi, Deutsche Bank, GMAC, Nationstar Mortgage, Ocwen Financial Corp., Saxon Mortgage Services, U.S. Bank, Wells Fargo, Fannie Mae, Freddie Mac and the Federal Housing Administration.
The National First Look Program — the first-ever public-private partnership between HUD and the National Community Stabilization Trust — will help governments and nonprofits compete better with private investors for bank-owned properties, which HUD says hinders efforts to stabilize neighborhoods with high foreclosure activity.
“Local communities will now get an exclusive option to buy foreclosed properties in targeted neighborhoods so they can turn the homes into affordable housing, or in some cases, tear them down,” said HUD secretary Shaun Donovan, in a release. “This agreement helps us level the playing field to give communities a better chance to stabilize these neighborhoods.”
The First Look program will allow Neighborhood Stabilization Program participants the exclusive opportunity to purchase available real-estate owned, or REO, properties within the defined boundaries of a foreclosure target area. The participants will have 24 to 48 hours to express interest and then will have up to 12 business days to commit to the purchase, sometimes at a discount provided by the bank.
If the government or nonprofit entity doesn’t purchase the home, the bank would then go through the normal foreclosure auction process
Read more: HUD, banks band together to give edge on foreclosed homes - Tampa Bay Business Journal