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HUD Rising to the Challenge of Foreclosure Crisis

HUD is rising to the challenge thrown by the foreclosure crisis. It is persisting along Grand Strand – unchecked by the various government programmes. But Department of Housing and Urban Development has chalked out plans to enable more families to stay in the houses that are their home by giving support to affordable housing.

Last August there were 471 foreclosures – a drop of 3% from the previous month but an increase of over 200% from 2009 August. Georgetown registered an increase of 33% from last July and a spike of 50% from 2009 August as per the findings of RealtyTrac.

When this news was release Ron Sims the Deputy Secretary of HUD was speaking in South Carolina regarding the efforts of his department to check foreclosures and bring about other changes by speeding up decisions. Sims was the executive of King County, Washington prior to taking over the HUD assignment. He said that previously he avoided HUD jobs because it was noted for being inefficient; instead he decided to raise private funds for developing affordable housing plans. This experience is now helping him to bring about some fundamental changes in HUD so that decisions could be made at the local level – thus speeding up matters.

Sims in reply to questions said that when the process was first initiated, the federal government forged ahead in a great way to help the people continue to stay in their homes and stop foreclosures. This was done on the presumption that the market would be responsive. It was hoped that the financial entities advancing loans would be compelled to realize by the market forces that this way their losses would be reduced. But this did not happen. But HUD now is not leaving any stone unturned.

The focus of HUD is now on the underwater mortgages. A process is being developed so that the mortgage value is brought down either in a short or long term way so that ultimately the houses are not lost.

HUD has already done commendable work as regards implementation of the Neighborhood Stabilization Program. Sims added that HUD is “doing everything that is humanly possible to keep people in their homes”.

He said that according to the federal government there are many defaulting but as yet the lenders are not foreclosing on them. They are facing the problem of how they can weather the storm. People are coming to them with this query. New ideas are being mulled over as new instruments are rolling in.

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