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Community Development

Spotlight on the District

Georgia
New Life for Foreclosed Properties

Rehabilitation of foreclosed or abandoned property by local governments, nonprofits or housing providers is an important step on the road to neighborhood recovery in areas hard-hit by foreclosure. Financial institutions play a significant role in this process, and a new organization, the National Community Stabilization Trust, is designed to smooth the way.

Working directly with financial institutions
Collaborations among nonprofits, financial institutions and civic-minded volunteers can help bring neighborhoods back to life. The Initiative for Affordable Housing is a private nonprofit agency in Atlanta, Georgia, founded in 1990 by two churches with long histories of social involvement in the local community. Executive Director Lisa Wise is partnering with the Chase/Washington Mutual/EMC Real Estate Owned Gifting and Discounted Sales Program to refurbish three properties in an area of DeKalb County heavily affected by foreclosures.

A group of volunteers from the Federal Reserve Bank of Atlanta rehabbed one of the properties, and volunteers from JP Morgan Chase, Emory University and Agnes Scott College are completing work on the remaining two.

"The total rehab cost for the three properties isn't expected to exceed $15,000," says Beverly Dabney, first vice president and senior community affairs relationship manager of Washington Mutual (WaMu)/JP Morgan Chase.

Like similar programs at other financial institutions, the Chase/WaMu/EMC program works with nonprofits and government entities to donate or sell real estate owned (REO) properties to help areas with high foreclosure rates.

The National Community Stabilization Trust eases the way
The National Community Stabilization Trust (NCST) is a collaboration of five leading community development organizations—Enterprise Community Partners, Housing Partnership Network, Local Initiatives Support Cooperation, NeighborWorks America, National Council of La Raza and the National Urban League. The organization facilitates the transfer of foreclosed and abandoned properties from financial institutions nationwide to local housing organizations. The goal is to promote productive reuse of property and foster neighborhood stability.

The NCST provides two types of services: First, it acts as a central point of contact with the financial institution that holds the property. It establishes a streamlined process for identifying, inspecting and evaluating offers from the seller. And it makes it possible for prospective government and nonprofit buyers to acquire the property before it goes to market.

Second, it assists with the short- and intermediate-term financing needs of participants through an affordable, revolving line of credit. This allows for better leverage of Neighborhood Stabilization Program funds, as well as provides more flexible financing for stabilization activities.

The NCST is working in 100 communities in 35 states. In places where NCST is not operating, local recovery efforts are forging their own partnerships with lenders and servicers that hold REO properties, much like the Initiative for Affordable Housing in Georgia has done.

This article was written by Sibyl Slade, senior regional community development manager of the Federal Reserve Bank of Atlanta.

For more information:
Chase/WaMu/EMC REO Gifting and Discounted Sales Program, Yves M. Mombeleur, vice president/program manager, yves.mombeleur@wamu.net or 817-581-6513.
Chase's REO listing, www.mortgage.chase.com/pages/other/co_properties_landing.jsp.
WaMu's REO listing, www.wamuproperties.com
National Community Stabilization Trust, www.stabilizationtrust.com/