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Community Coalition Purchases 47 Homes in Foreclosure

Posted by ecoshift on April 1, 2009

HousingWire || financial news for the mortgage market
Community Coalition Purchases 47 Homes in Foreclosure
By KELLY CURRAN
April 1, 2009 1:07 PM CST

The first large-scale purchase of defaulted mortgages by an alliance of U.S. nonprofit organizations was announced Wednesday. HANDS, Inc. said it has acquired the defaulted mortgages on 47 vacant homes in the greater Newark area, all of which are vacant and abandoned.

HANDS purchased the mortgages from J.P. Morgan Chase (JPM: 28.14 +5.87%), as part of a new strategy to reclaim neighborhoods hard-hit by foreclosure, and is working with its partners in Operation Neighborhood Recovery to rehabilitate the properties so they may become “cornerstones for productive change in their surrounding communities,” instead of magnets for increased crime and vandalism, creating general neighborhood blight.

“Time is our enemy and early intervention is the key to battling the destabilizing influence of abandoned and foreclosed properties on neighborhoods,” said Patrick Morrissy, executive director of HANDS, a member of the NeighborWorks network. “We knew that as time passed, the properties would continue to deteriorate, their values would plummet, as would the home values in the overall neighborhood.”

HANDS will ultimately convey groups of the properties to Operation for Neighborhood Recovery partners that work in the properties’ respective neighborhoods, and who have agreed to rehabilitate the properties and make them available for affordable homeownership.

One may ask how such an organization acquired the funds to purchase, repair and maintain 47 homes — a cost which is anticipated to total around $5.4 million. New Jersey Community Capital, a community development financial institution working throughout New Jersey, took a lead role in the transaction, according to a HANDS press statement.

The institution coordinated the provision of debt and equity from Prudential Social Investment, Local Initiatives Support Corporation-Greater Newark & Jersey City, NeighborWorks America, and Enterprise Community Partners.

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