Access Eases for Property Rehab Funds
Rules for the $4 billion federal program allowing municipalities to buy properties in mortgage and tax default were relaxed Friday by the Department of Housing and Urban Development.
The new rules will allow communities to spend their allotment on houses that are at least 60 days delinquent on their mortgages or tax payments and/or on properties that have had a code violation for more than 90 days where the property is uninhabitable and the owner isn’t cooperating.
Previously, communities complained that the rules were so restrictive that fewer than one-third of the 300 participating local governments were able to use the money.
Source: The Associated Press, Tamara Lush (04/02/2010)
JMO: I need to do more research to determine what is meant by the term "allowing municipalities to buy properties in mortgage or tax default". Although it could be interpreted to mean that municipalities can foreclose on properties due to tax liens, a municipality does not have a right to take your property simply because you are in mortgage default. At first glance, I interpret it to mean that municipalities can enter the market as cash buyers of short sales and foreclosed properties.
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