The Foreclosure Problem in Alaska is Manageable

Posted on January 9, 2009
Filed Under Foreclosure Homes | 1 Comment

The foreclosure problem in Alaska lacks the sting of other states and is manageable. It will be getting $20 million from federal kitty to benefit regions rather than individual foreclosure victims. HUD has given the green signal to the spending of $19.6 million for this purpose.

Those who are at risk from foreclosures will not be assisted but the areas with the largest number of foreclosures will be targeted by it according to Bryan Butcher of Alaska Housing Finance Corporation dealing with governmental public relations. He said, “Our foreclosures are up just a little bit from what they’ve been in the last year or two, but we’re still better off than any other state in the country.”

Towards the close of 2008 the foreclosure rate in Montana is lower than what it was in the beginning of the year. Alaska now occupies the lowest rank as regards foreclosure numbers. Till September the foreclosure rate was 1:100 – calculating to 88%. California was four times that number and the rate in Nevada and Florida was even higher.

The funds will be spent evenly around the state and may be given to some private bodies having experience in the line. One of them is Cook Inlet Housing Authority. The state will soon be asking partners to come up with suggestions regarding the spending of the money.

The organizations could purchase foreclosed houses at a discount from the lenders, renovate them and sell them to those with low to moderate income, said Lona Hammer of Alaska Housing Finance Corporation. A big amount – about 60%, will spent for buying abandoned foreclosed units and then renting them out to the weaker economic section of society A moderate number of people – may be 20 or so, will get financial help towards making down payments.

Lee Jones of HUD said that the aim is not to bail out the lenders but to bring back the health to those regions that have been hit by the foreclosure virus. Here Neighborhood Stabilization Program is applying the ‘broken window’ theory. It is reasoned that if a broken window is not repaired then windows in neighbouring houses are likely to also remain broken and unattended to. This will lead to an escalation of problems. Jones explained, “And more and more problems will begin to be developed … and it won’t just be broken windows … Roofs that aren’t replaced, porches that begin to sag, doors that begin to fall off the hinges.”

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