City of Visalia Fights Foreclosure Crisis

October 21, 2008 7:54:36 PM PDT
Money from the $700-billion dollar Wall Street bail out is starting to trickle down into the central valley.Most of the cash will help the financial industry, but a portion will go to communities hit hardest by home foreclosures.

Five homes on this one block alone are in foreclosure. Officials hope millions from the $700-billion dollar bail out will help lower the number of foreclosures that are riddled across the city.

All the homes on the 2400 block of Sweet Avenue in Visalia are brand new. But happy homeowners here are few and far between.

Alan Wileman said, "A lot of For Sale signs lately."

Officials say many of Visalia's newest neighborhoods are the hardest hit by foreclosures. Several people on this block are now renting after they lost their previous homes. Now they're finding the owner of their rental home is also facing foreclosure.

Olga Villagomez said, "And we found this house the house it was rent to own and we were supposed to give money to the guy to keep the house but what happened the house it was in foreclosure."

Jacquelyn Malone found this default notice posted to her door.

Jacquelyn Malone said, "The landlord said he was going to catch up on the rent and he never did so we just stopped paying rent and well he said just wait till the bank asks you to leave and so we've been waiting for that."

City leaders say part of the $700-billion dollar bail plan was set aside to go to cities with the highest foreclosure rates. Visalia is one of them, getting almost $2.4 million. City leaders say the money will help them buy some of the up to 1300 foreclosed properties in Visalia.

Visalia City Manager Steve Solomon said, "That money can be used by the city to buy houses, rehabilitate them and resell them there are restrictions on the incomes of the people you resell the houses to."

Solomon says the money will not help renters or homeowners currently facing foreclosure problems, but it could help Visalia reduce the overall number of foreclosed homes in the future.

With all the foreclosures, construction of new homes continues in this neighborhood ... even after the homemaker-Woodside Homes-recently filed for bankruptcy.

City leaders say the foreclosed properties they buy will be sold to people of a required income and come with a standard fixed-rate mortgage with a down payment.

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