State officials sought and got advice from housing and community development groups Tuesday on how New Jersey should distribute $51.5 million in federal emergency funds to help neighborhoods shellshocked by the foreclosure crisis.The money will not be used to keep people in their homes but to fix up foreclosed properties and find new occupants for this. Hopefully this combined with the new Foreclosure Trust Fund will impede the downward spiral of foreclosures.
The state and its partnering organizations can use the federal money to buy abandoned or foreclosed homes; demolish, redevelop or rehabilitate properties; offer down payment and closing cost assistance to home buyers; and convert properties to affordable housing. All projects must benefit low- and moderate-income people.
The program will provide $3.92 billion in direct funding to all 50 states and more than 250 local cities and counties.
...Aside from the state, five local governments are getting between $2 million and $3.5 million in federal funds — Bergen County, Jersey City, Newark, Paterson and Union County.
"This $51 million is a drop in the bucket compared to the problems we have in New Jersey," said E. Michael Taylor, director of Essex County's housing and community development division. "Our foreclosure problem in New Jersey right now is primarily an urban issue, but, by this time next year, it will be a deep suburban issue."
As foreclosures hit an area they drive down property values in the surrounding areas, thereby increasing the foreclosure rates. People are left with negative equity (underwater) and can not refinance. And the hurdles that people need to jump through for Hope Now seem to just get higher and higher.