Foreclosures in Palm Beach Being Grabbed by Investors
The US economy is going through one of the most challenging phases. Unemployment is at an all-time high. As people lose jobs, they are faltering on mortgage payments. Hence, foreclosures have become common. These foreclosed homes are now available at a bargain. Take, for instance, Palm Beach County in Florida. The foreclosed homes in the region are being grabbed by investors who are making all-cash deals. As a consequence, the home-owners are being left out of the housing market. These buyers are keen on buying foreclosed homes with financial support of the local government.
Almost every local government had started the Neighborhood Stabilization Program to help troubled homeowners. Around 400 people had applied for the program but this program is yet to take off because of several reasons. A very important factor is that most of the applicants are cash-strapped. Hence, they are being outbid by investors. Another reason is the lack of suitable foreclosures in the market. Most of the foreclosed homes are in very poor condition. They desperately are in need of repair.
Another reason why the NSP initiative is yet to take off is the condition imposed by the local bodies that the foreclosed properties must be located in areas which are battered by the wave of foreclosures. A disappointing trend in Palm Beach County is that the NSP applicants are always being outbid by investors.
A prospective buyer — Sharon Burgess – has however, qualified to buy a home in Palm Beach. She has even qualified for a loan of $78,000. She said that she had been hunting for a home for the last one month and she is happy to have qualified for the loan. Burgess said that whenever she went to buy a home she had always been outbid by investors who were willing to pay in cash.
The head of the Miami office of the U.S. Department of Housing and Urban Development, Armando Fana, said that he is aware of the problem and that he would discuss the matter with the bankers soon. It may be noted that the Housing and Economic Recovery Act of 2008 proposed setting up of the NSP. As a part of this program, $3.92 billion was pumped into the counties, cities and states. Palm Beach got $27.7 million. This amount was divided and routed into several ongoing projects. About $12.8 million will be used to help people buy foreclosed homes.
