Banks, GSEs Spend More Money to Spruce Up REOs
December 12, 2011
Foreclosed homes continue to hamper nearby property values. In some cities, foreclosures were found to decrease nearby property values up to $17,000, according to a new report from the Government Accountability Office (GAO).
More programs are being aimed at rehabbing foreclosed homes so the harm to property values won’t be as great.
According to the GAO report, Fannie Mae and Freddie Mac doled out $953 million last year to maintain and fix up vacant homes.
"We are committed to stabilizing communities and helping the housing market recover," a Fannie Mae spokesperson told HousingWire. "Our goal is to sell REO properties at a competitive market rate, and maintaining our properties is an important part of achieving that goal."
Since 2008, investors and nonprofits received $6 billion in grant money from HUD’s Neighborhood Stabilization Program to maintain and fix up vacant homes. In Detroit, the city spent $20 million last year demolishing vacant homes or rehabbing ones that could still be saved after neglect.
Wells Fargo & Co. said recently it will donate $5.53 million to 52 nonprofit groups through its Leading the Way Home Program Priority Markets Initiative so that the groups can purchase and redevelop foreclosed and abandoned homes.
"These grants will help stabilize and rebuild local communities," Kimberly Jackson, executive director of Wells Fargo's Housing Foundation. "We want to do what we can to make resources available to support efforts led by nonprofits to revitalize neighborhoods in cities that have felt the effects of financial difficulties and a challenging economy."
Source: “GSEs Spend Nearly $1 Billion on Property Preservation,” HousingWire (Dec. 9, 2011) and Wells Fargo
Updated: November 23, 2020