Programs would help rescue foreclosures in Hollister
To help ease the foreclosure crisis, Hollister staff is
proposing a two-pronged program to Hollister’s Redevelopment
Agency, said April Wooden, Hollister’s redevelopment program
manager.
Programs would help rescue foreclosures in Hollister
To help ease the foreclosure crisis, Hollister staff is proposing a two-pronged program to Hollister’s Redevelopment Agency, said April Wooden, Hollister’s redevelopment program manager.
“It’s really getting scary,” Wooden said. “Over the fall it just kept getting bigger and bigger.”
Bank-owned homes bring down the value of every home in a neighborhood, Wooden said.
There were 589 homes in some stage of foreclosure, as of Feb. 21, said Mike Chambless, Hollister’s code enforcement officer.
“Our plan from the redevelopment approach is to jump start the city’s first-time homeowner program again,” Wooden said. “Take those first-time home buyers, give them down payment assistance, get them into one of those vacant homes.”
City officials would loan low-income first-time homebuyers up to $50,000 for a down payment on a foreclosed house that lies within the redevelopment project area, Wooden said.
The loan would be offered at 1 percent interest, according to documents from Wooden.
It would be paid back if the homeowner moves out or sells the home before the 45th year, according to the documents.
City officials would spend up to $1 million on the program, Wooden said. That could help about 20 families, Wooden said.
For a family of four, the median income in San Benito County is $74,700, Wooden said.
That would buy a house for around $300,000, due to federal law capping the amount that one person can spend on housing in government-assisted programs, Wooden said.
Hollister officials ran a similar homebuyer program for seven or eight years, said Bill Avera, Hollister’s development services manager. The program started sometime around 1995, he said.
During the housing boom in 2003-2005, people making the county’s median income needed more money for a down payment than the city could afford to lend, Avera said.
The second part of the mitigation program would help families in pre-foreclosure keep their homes, Wooden said.
Wooden attended a workshop by a for-profit company called Homeowner Rescue Alliance (HRA).
“I went in very skeptical,” Wooden said. “Why are we going to be directing people to them?”
The program is designed for people who are in pre-foreclosure or fear they might soon face foreclosure, said Violeta Perez, who handles media and event relations for HRA.
It is free for attendees, Perez said.
Staff from HRA would be paid a fee by staff from lending institutions, Perez said. The fee will be negotiated with lender staff later, she said.
HRA staff are running a pilot program in the 28th Assembly District, Perez said. It is endorsed by 28th Assembly District representative Anna Caballero, Perez said.
“What I see, the RDA’s role in all of this is to help get the word out on all these workshops,” Wooden said. “Instead of us trying to do it, it makes more sense for us to get people to these workshops.”
HRA staff will sort interested parties into groups based on lender, Perez said. The loans will be packaged into $100 million groups.
“That’s more of what they want to see,” Perez said. “We can negotiate much stronger terms for the homeowner rather than the homeowner individually.”
After the loans are packaged, HRA staff would renegotiate the terms of each individual loan on behalf of the homeowner, Perez said.
It would be worth it for a lender, and their investors, to renegotiate the terms of a loan, Perez said.
“It can be $65,000 to $80,000 to foreclose on a home,” Perez said.
Staff for lending institutions have already expressed interest, Perez said.
“Some of the top lenders have said that this is what they’ve been waiting for,” Perez said. “They said, ‘go out and get them for us.’ Now we’re in the process of pulling them together.”
