Historically, increased foreclosures and declining markets attract investors whose primary goal is short-term profits. Properties owned by these investors typically have an adverse effect on neighborhoods and communities.

Enterprise Community Partners suggest the need to provide greater incentives to lenders/servicers to enter into REO disposition methods that result in positive steps for communities.

Some of proposed concepts include:

Regulators
The Federal Reserve Bank, OCC, FDIC and the Office of Thrift Supervision examine and rate banks on their performance of their obligations under the Community Reinvestment Act (CRA). These regulators  can

• Encourage banks to participate in loan programs, grants and other investments to low and moderate income homeowners facing foreclosure;
• Encourage banks to participate in lending and investment activities in the support of rehabilitation and resale of foreclosed properties and
• Apply significant weight to the investment test portion of the CRA for banks that make such investments

REO Gifting
The donation of real property to a non-profit or state and local agency with the capacity to restore the property to productive use complies with CRA investment requirements. Regulators should issue guidance strongly encouraging banks to fulfill their CRA obligations by donating or selling deeply discounted REO assets to non-profit or state and local agencies.

Congress

• Special allocation of tax credits to qualified Community Development Entities (CDE), This capital infusion will allow CDE's to loan or make investments in low incone areas
• Foreclosure Revitalization Grants - a new resource would be used to facilitate acquisition, rehabilitation and sale of foreclosed properties
• Temporary tax incentive to owners of non-FHA foreclosed properties to sell to local or state governments or non profit developers
• Reinstate the FHA upfront grants programs e) Federal Home Loan banks are to direct their Affordable Housing Program funds to the acquisition and rehabiliitation of foreclosed properties for low income Americans.

To view the full text of Ali Solis's presentation, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, OH  and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 450 employees.  Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.