Bank of America (BAC)
has resold 1,340 previously foreclosed homes to buyers who used grants from the Department of Housing and Urban Development
The money comes from the Neighborhood Stabilization Program. Since July 2008, roughly $6 billion in NSP funding has been disbursed through two rounds of grants. Local and state governments, including nonprofits received the money to buy, rehabilitate and resell foreclosed property, or REO.
House Republicans voted to block
the third round of NSP funding, which would provide another $1 billion to recipients. They argue the government can no longer afford such subsidies, which could also be interpreted as a further bank bailout, since the funds end up at the banks.
A spokesperson for BofA said the sales totaled $131 million since the first quarter of 2009.
Proponents of the program say it was designed to clear out vacant and blighted properties that continue to drag down home prices for homeowners who have remained current during difficult times.
"Walk through Detroit and see if private enterprises are there to buy up property," Rep. Al Green (D-Texas) said during a House Financial Services Committee hearing. "They're not. That's why we need this program."
Speaking at the SourceMedia Mortgage Servicing Conference on Wednesday Gabrielle Harrison, production executive for BofA REO, said the bank will soon be looking for other avenues of selling its inventory. This includes using its network of real estate agents, auctions and nonprofits.
"Having such a diverse portfolio," she said, "means you have to have diverse strategies."
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