Dallas-Fort Worth city officials plan to use $6.2 million in federal funds to help people buy foreclosed homes in areas that have been hit the hardest by the foreclosure crisis. The money will come from the U.S. Department of Housing and Urban Development's Neighborhood Stabilization Program, and will target areas with high rates of foreclosures and subprime mortgages, mainly outside Loop 820.
Dallas-Fort Worth has had 3,780 foreclosures since September 2007 and officials plan to loan to money for buying those foreclosures directly to borrowers in $20,000 increments. If the borrowers stay in the foreclosed home for at least five years, the city will forgive the balance of loan. Half of the money in the special fund will be loaned to low-income families making less than $32,300 a year for a family of four while the rest will be loaned to people making up $77,500.
"Our goal is to get more property into the hands of homeowners," said Jerome Walker, the city's housing director.
I think this special foreclosure loan program is a great idea; but just one question...who will oversee this process so that borrowers aren't given toxic mortgages (again) and repeat the cycle of being foreclosed on? I understand city officials want to reduce the number of vacant properties in Dallas-Fort Worth and I commend that; but the root of our current foreclosure problem is that debtors are entering into loans with unreasonable terms and loan amounts that aren't affordable for their budget. I hope we don't repeat the same mistakes with this foreclosure loan program.