Home Foreclosures in Palm Beach Snapped up by Cash Buyers

Home foreclosures in Palm Beach County, Florida are being snapped up by cash buyers leaving nothing for lower-income or moderate-income families who are trying to buy foreclosed houses with financial assistance from the Neighborhood Stabilization Program.

There have been almost 400 applicants for the NSP initiative, but not one has been approved because of various reasons, including the outbidding of applicants who have no cash to pay the sellers, the lack of foreclosures in places preferred by the applicants and the failure of applicants to find a home they like in the neighborhoods chosen by the county.

The NSP initiative has certain policies that recipient counties or cities receiving the funds must comply with, including the requirement that the foreclosure properties to be purchased must be located in the most foreclosure-battered neighborhoods in the county.

However, although NSP applicants in Palm Beach County find foreclosure homes that they like, they are always outbid by cash investors.

Sharon Burgess is one prospective buyer whose NSP application has been approved and has been pre-qualified for a $78,000 home loan. She said that she has been searching for a foreclosed house for over a month and her deadline to close is fast approaching.

Burgess related that whenever she goes to see some home foreclosures, she would find that the properties are already purchased by investors with cash.

Armando Fana, head of the Miami office of the U.S. Department of Housing and Urban Development, said that his department has been notified about the problem and he will be holding a meeting in November to meet with bankers and discuss the issue.

The NSP was funded by the Housing and Economic Recovery Act in 2008 with $3.92 billion, which was distributed to states, counties, cities and nonprofits.

Palm Beach County received $27.7 million, which was then divided to fund several schemes. Around $12.8 million will be spent to help individuals or families to buy foreclosed homes, $5 million will be provided to cities and nonprofits for their own initiatives of buying and fixing foreclosed houses and $7.5 million will be used to buy properties for public use.

Under the program, counties are allowed to be innovative in how they carry out the program as long as they comply with the basic requirements. Some are working with nonprofits like Habitat for Humanity; others are providing money for closing costs and down payments for the purchase of home foreclosures.

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