Gornstein said CHAPA will run as a clearinghouse for community associations that buy bank owned properties and then upgrade them for needy families. He also said CHAPA will make sure that buyers of these upgraded foreclosure properties are able to afford the monthly payments to prevent another cycle of foreclosure. CHAPA will also exclude from the program investors and speculators who usually do not put much effort in upgrading repo properties.

The city of New Bedford was selected as the launching site for the program to highlight the program’s focus on helping neighborhoods battered by foreclosed properties. New Bedford contributed a large percentage of the over 12,000 distressed properties in Massachusetts in 2008. As tracked by real estate researcher Warren Group, the number of foreclosure properties across Massachusetts increased by more than 300 percent from 2006 figures.

To make the program more effective, CHAPA will connect mortgage lenders that own foreclosure properties in Massachusetts to local housing nonprofits and local government agencies. These include Freddie Mac, Fannie Mae, Bank of America and other mortgage banks. This strategy will enable local agencies and housing nonprofits to have a first look on foreclosed homes before they are offered for sale to the public. CHAPA also got commitments from banks they will sell bulk foreclosure properties in certain communities to participating associations.

During the launching, government officials including U.S. Representative Barney Frank, chairperson of the House Committee on Financial Services, toured the streets of New Bedford and viewed abandoned multifamily apartments that would be bought and rehabilitated under the initiative. Frank highlighted the significance of the state initiative by saying that foreclosures hurt homeowners in the neighborhood.

The Foreclosed Properties Initiative will use its share of the $54 million federal money allocated for state foreclosure programs. It can also use other state funds legislated for public development projects.

Massachusetts Repairs Foreclosure Properties for Families is a post from: Foreclosure Homes Investing