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Now the City Is Flipping: Foreclosure Buying Begins

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Yesterday U.S. Housing Secretary Shaun Donovan joined local politicians on a tour of foreclosed homes that are being purchased under the Neighborhood Stabilization Program, a program that's funneling $6 billion of federal money towards foreclosure help. But as LA Land blogger Lauren Beale points out, this prorgam "sounds like a drop in the bucket," since the $33 million the city intends to use to buy up homes may not go very far. The city saw 21,000 foreclosures in the last two years and the entirety of the money would enable the city to buy about 330 homes. On the bright side, the article does give an example of a sales/financing history of one property that pretty much sums up the entire housing bubble. Ah, good old 100 percent financing. Via the paper:

"On 82nd, across the street from Lubiano, the duplex the city is buying went into foreclosure in June 2008. Anthony Chatman, the real estate broker hired by the bank, wasn't able to put it on the market, though, because the renters had stopped making payments but refused to leave. They were evicted in February. Their landlord bought the home for $470,000 in August 2006 with 100% financing at a variable interest rate from Washington Mutual Inc. The home had sold just five years earlier for $60,000. Chatman was planning on listing the home for $179,000 in March when he was contacted by the city. They are still negotiating a sale price, he said."

· L.A. starts buying up foreclosed homes with federal aid [LA Times]
· L.A. as landlord [LA Times]