Fannie and Freddie Help on Foreclosed Homes

Here is some good news for neighborhoods that have a lot of foreclosed properties and where potential home buyers are hard pressed to find financing. The New York Times reported that Fannie Mae and Freddie Mac are offering financing incentives for buyers of foreclosed homes that Fannie and Freddie own.

Home buyers have until October 30 to apply to take advantage of Freddie Mac’s SmartBuy program, which began in July and offers up to 3.5 percent of a home’s sale price to help cover closing costs. Through participating lenders, Fannie Mae will offer mortgages to buyers who make a down payment of 3 percent, and these buyers do not have to secure private mortgage insurance, as they would when doing business with nearly any other lender.

Also, in areas hit hardest by the economic downturn that have qualified for federal financing through the National Stabilization Program, which helps distressed communities, Fannie Mae may discount its foreclosed properties by up to 15 percent, The Times reported.

Most of Fannie Mae’s foreclosure incentives are offered to buyers who will use the property as their primary residence, or NeighborWorks or other local organizations that rehabilitate properties and sell them to owner-occupants. View article.

Social Investors Find ‘Silver Lining’ in Foreclosure Crisis by Partnering With Nonprofits

The Christian Science Monitor reported recently that affordable housing purchased by social investors is allowing low-income earners to find community-oriented housing in expensive markets from Marin County, Calif., to New York City. Areas where teachers, waiters, and receptionists typically can’t afford to live are now within reach, thanks to a growing number of partnerships between housing nonprofits and investors.

In Columbus, Ohio, NeighborWorks member Columbus Housing Partnership has forged a new partnership with regional lender Huntington Bank. Together, they formed the Huntington Homeownership Alliance, a three-year, $10 million effort that funds home buyer education workshops, online virtual foreclosure counseling, and loan products designed to help families buy houses from CHP’s inventory of affordable homes.

CHP President and CEO Amy Klaben pointed out to The Christian Science Monitor that despite the increase in socially responsible lending, sustainability is a challenge. Though CHP can now buy five homes for a relative bargain, if there are still 15 more vacant houses on the street, “you aren’t making a market impact,” Klaben said.

Read more.

Report: States with Tough Anti-Predatory Lending Laws Post Lower Foreclosure Rates

States with strong anti-predatory lending laws fared better during the foreclosure crisis than states without these laws, according to a new study conducted by the University of North Carolina at Chapel Hill's Center for Community Capital.

The study also found that after the federal government exempted national banks from state anti-predatory lending laws in 2004, national banks increased their subprime lending, especially in states where other lenders remained subject to strict anti-predatory lending laws.

The study, “State Anti-Predatory Lending laws: Impacts and Federal Preemption,” found specifically that:

• As of June 2008, the foreclosure rate was 12 percent higher in states without anti-predatory lending laws.
• Mortgage loans made in states with strong anti-predatory laws were less risky. In these states, average credit scores were higher, and average debt to income ratios and loan-to-value ratios were lower.
• National banks showed a marked increase in subprime lending following federal exemption. The biggest jump (from 9 percent to 20 percent) occurred in those states where national banks had been subject to stricter laws until 2004, but after that date, gained a competitive advantage against other lenders who remained subject to higher state standards.

The study was funded by the North Carolina Department of Justice and the National State Attorneys General Program at Columbia University. Read more findings in the news release.

Community Stabilization Photo Contest - Deadline October 30

NeighborWorks America’s Stable Communities Program is holding a photo contest in conjunction with the NeighborWorks Training Institute Symposium: “Rising to the Challenge: Stabilizing Communities in the Wake of Foreclosure,” which will be held on December 9, 2009 in the Washington DC metro area. Photos related to community stabilization and neighborhood revitalization efforts, particularly in areas impacted by foreclosure, will be accepted.

The contest is open only to NeighborWorks chartered organizations, and thus NeighborWorks America will not accept photo submissions from other organizations.

Prizes will be awarded as grants to the NeighborWorks organizations submitting the winning photos, as follows:

• First Prize: $2500 grant
• Second Prize: $1500 grant
• Third Prize: $1000 grant

The winning photos will be unveiled in a presentation at the Symposium. See how to enter and other rules.

NeighborWorks America Reaches Out to Vietnamese Community

NeighborWorks America supported a first-ever Vietnamese Community Leadership Institute (CLI) in Seattle in September. It was sponsored by NeighborWorks Community Building and Organizing Program, at the request of its member organization HomeSight, Inc. NeighborWorks sponsors national community leadership institutes each year, but this was the first time a NeighborWorks organization has held an in-language, culturally-based institute.

“Many local NeighborWorks organizations have created their own local CLI's upon return from one of our national events,” said Susan Naimark, acting director of NeighborWorks national CBO programs. “When Tony To, HomeSight's executive director, asked for support to do a bilingual CLI for the Vietnamese community, we were glad to offer our assistance.”

HomeSight hired one of NeighborWorks most seasoned community building and organizing trainers, Karimah Nonyameko, to work with a local Vietnamese trainer. This ensured the relevancy and cultural appropriateness of the training. Having the program in-language also made it a lot more personal for the people involved.

“I’ve been to a lot of leadership training in my line of work, but the VCLI gave me tools to reinforce my knowledge and it also renewed my passion to work in the community,” Thu-Van Nguyen, who works at Asian Counseling and Referral Services, told Northwest Vietnamese news.

“We look forward to sharing the materials and learnings from this event with other organizations across our network,” said Naimark.“It's a great model for working with non-English speaking communities, giving them tools to engage with each other and the broader community.”

View photos from the event.