Foreclosure Aid Is More Than Some States Need


In 2008, Vermont had 137 foreclosures, the fewest of any state in the nation. It had precisely zero foreclosures in the first quarter of this year, according to RealtyTrac.

So why did Congress give it nearly $20 million in 2008 to deal with empty homes from the mortgage crisis? The same amounts went to Nebraska, Wyoming, West Virginia, Utah, and each of the Dakotas, which also have extremely low foreclosure rates. Will this affect home values in your neck of the woods?

Those are the kinds of questions the Obama Administration is now asking about the Neighborhood Stabilization Program, which has distributed $5.9 billion across the country to help states and cities board up, repair, sell or tear down empty, foreclosed houses.

Congress' first round of grants gave states a total of $3.9 billion to spend to stop vacant homes from blighting their streets. Every state got something, with a minimum of $19.6 million, no matter how few foreclosures they had. Hundreds of cities received grants as well.

They got 18 months to decide what to do with the money, and until 2013 to actually spend it.

Now the U.S. Department of Housing and Urban Development projects that nearly $1 billion of that money won't be committed by the first round of deadlines, coming up this September and October – and it wants it back.