County to target foreclosures with federal money

Sam Morris / FILE PHOTO

This photo from June shows the home at 3128 Blossom Glen Drive in Henderson, which was abandoned and falling apart. Like many homes in the valley, the disrepair can be blamed on foreclosure.

By Jeff Pope (contact)

Tuesday, Nov. 18, 2008 | 5:43 p.m.

Neighbors living near unkempt abandoned houses due to foreclosures in unincorporated Clark County should start to see more neighborhood improvements by the middle of next year.

If a $4 billion federal program designed to reduce the number of bank-owned homes works as intended, Southern Nevada governments will have about $64 million by March 2009 to reclaim some of the more than 12,000 foreclosed homes in the valley.

Faced with one of the highest foreclosure rates in the country, Clark County released a seven-part plan Tuesday on how it will use $23 million in federal dollars plus another $8 million from the state's allocation in unincorporated areas.

The bulk of the funding provides down payment assistance to low- to moderate-income home buyers on foreclosed properties only and money for the Housing Authority of Clark County and designated nonprofit organizations to purchase and rehabilitate foreclosed or abandoned properties for resale or rental.

"This is an opportunity to get those homes into the hands of families, while at the same time improve neighborhoods that have been blighted for years," County Commission Chairman Rory Reid said. "This has to be a community effort where we work together with other jurisdictions and nonprofit organizations because they're going to be doing much of the work here."

Commissioner Lawrence Weekly, whose District D has the most foreclosed homes, said the county would not own any property but would act quickly to disburse the funds once they become available.

"We figure by the summer of 2009, we should see some real action taking place, boards taken off of houses and families are back into those foreclosed homes," he said.

All of the funds must be used for individuals and families whose income does not exceed 120 percent of area median income. The income limit in Clark County for a family of four is $76,700 and $53,000 for an individual.

A buyer who qualifies for an assumed standard fixed rate 30-year mortgage would be able to purchase a foreclosed home for about $185,000 under the plan, said Mike Pawlak, manager of the county Community Resource Management Division.

The money is tagged to areas with the highest percentage of foreclosures, areas with the highest percentage of homes financed with subprime mortgages and areas expected to continue to increase in foreclosures.

The majority of the targeted neighborhoods are on the east side of the valley, but there are a few in the southwest and just south of McCarran International Airport also.

The program will not prevent additional foreclosures.

Although grateful for the federal assistance, Commissioner Chip Maxfield said he wanted the plan to help homeowners on the verge of foreclosure because they lost their jobs or earn less because of the souring economy.

"I was hopeful that this would help people that had the tables turned on them and they now don't have the job they had," he said. "They're facing every month, 'is that the month they go into foreclosure.' It's unfortunate we can't do something about that."

Jeff Pope can be reached at 990-2688 or jeff.pope@hbcpub.com.