Indymac and others get sweetheart deal - Is this why foreclosures takeso long or never even happen!?

A look at the Neighborhood Stabilization Program

A look at the program

The Neighborhood Stabilization Program is part of the Housing and Economic Recovery Act approved last August.

The U.S. Department of Housing and Urban Development was given $4 billion to award to areas with the highest foreclosure rates. City and state governments applied with plans for spending the money. HUD awarded funds to the Arizona Housing Department, Maricopa and Pima counties and Avondale, Chandler, Glendale, Mesa, Phoenix, Surprise and Tucson.

Most of Arizona's Neighborhood Stabilization funds are aimed at buyers who earn close to their respective city's median income. In most cases, buyers must earn $30,000 to $80,000 a year to qualify. The more people there are in a household, the higher the qualifying income level rises.

Phoenix's plan focused on a couple of dozen of the city's 79 ZIP codes, areas with the highest rates of foreclosure. Mesa was awarded $9.1 million and focused on ZIP code 85024. Chandler is buying 17 vacant foreclosure homes scattered across the city with plans to resell them to buyers.

Participating cities and the state Housing Department have assembled teams and designed a process to distribute the money. Under federal guidelines, buyers must pass a class on budgeting and the obligations of homeownership.

With those elements now in place, it's time to spend.

Fred Karnas, former director of the Arizona Housing Department who oversaw the state's plans for Neighborhood Stabilization funding, said, "It's a complicated program that has never been done."

"But HUD wants the money spent quickly to help people now, so we are on a fast-track schedule," added Karnas, who in February became a senior adviser to HUD in Washington.

Arizona gets federal cash on foreclosure impact

Arizona is getting federal money to help communities cope with the effects of foreclosures.

The Governor's Office says the Department of Housing and Urban Development will provide $38 million to the Arizona Department of Housing.

According to the Governor's Office, the neighborhood grant money can be used by local governments and non-profits to buy foreclosed homes, rehabilitate them and make it available to home buyers.

That helps communities by reducing the number of vacant homes, a step that helps combat crime.

I'm not so sure how this will be conducted. This story leaves me with a lot of questions to tell the truth.

More foreclosure news for Arizona

The highest rates of foreclosures in metropolitan Phoenix have moved from the farthest flung suburbs to neighborhoods closer into the area, particularly some in south, west and central Phoenix.

That's according to an Arizona newspaper's analysis of real-estate data from the Information Market.

When foreclosures started to climb last summer, the highest rates of home defaults were found in farthest flung areas where buyers had gone to get the most house for their buck.

Although some of the metro area's fringes such as Surprise, Anthem and Buckeye continue to have high foreclosure rates, the problem has moved inward.

Foreclosures across metro Phoenix number 16,647 for the first half of the year compared with 9,966 during all of 2007 and 1,070 in 2006.