NY Senator Seeks to Stop Investors from Bidding on HUD Foreclosures
February 11, 2008
U.S. Senator Charles Schumer is seeking to stop HUD foreclosure home sales to investors. He says that the investor “loophole” is causing communities such as Rochester to deteriorate. According to a recent Wxxi news article:
“Schumer says the speculators then try to “flip” the houses for a quick profit. If they don’t sell, he says they can stand vacant for months or years until they do.
Schumer says the problem is a loophole in a program designed to encourage public employees to buy homes in the cities where they work. They can buy a HUD owned foreclosed house for half the asessed price if they agree to live in it for at least three years and fix it up.
But if the property doesn’t sell within 15 days, it goes onto a general sale list. The senator says that’s when speculators grab the properties and hold them until they can be sold for profit — often leaving them vacant and rundown.
Schumer says he’s introducing legislation to block that loophole and he’s also pushing for more block grant funding to help Rochester rehab vacant houses.”
The senator isn’t the only one trying to remove investors from the HUD bidding process. Government officials in Indianapolis are considering buying up all the HUD foreclosure properties in three zip codes and rehabbing them to sell to low- and mid-income residents.
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[...] HudAuctionwatch, a Hud foreclosure site, has an interesting bit regarding the future of hud auctions. [...]