LevonP
12-13-2009, 02:20 PM
SOMERSET -- Trenton homeowners facing foreclosure could be getting a little relief.
Trenton is one of the eight communities that will be part of a $25 million partnership involving the Central Jersey Community Development Corp. and the Atlanta neighborhood revitalization company APD Solutions to fight foreclosures and the lack of affordable housing in central New Jersey.
"This will have a very positive impact on families in Trenton," said Trenton Mayor Douglas Palmer. "I think it's an excellent model that can be duplicated across the country."
The new partnership, announced earlier this month, would target homeowners facing foreclosure and buy their mortgages from the bank, essentially letting the partnership act as a new bank and renegotiate the terms of the mortgage. APD Solutions specializes in property acquisition, and CEO Vaughn Irons worked as Freddie Mac national director of expanding markets.
The Rev. DeForest Soaries, senior pastor of First Baptist Church of Lincoln Gardens and CEO of the Central Jersey Community Development Corp., said he expected the banks to cooperate with the partnership's efforts.
"We're one of the few agencies that has actually started buying people's homes," said Soaries. "We will buy those loans for the same amount that (banks) were going to sell them anyway."
Soaries hopes that having the partnership own the mortgages will help free up state and federal foreclosure assistance funding. That money, like New Jersey's $25 million Mortgage Stabilization Fund, can only be used if banks agree to write down a mortgage, that is, to reduce the listed value of the loan. Soaries said that commercial banks have been so far unwilling to write down the mortgages.
"When we become the bank, we'll be willing to write down the debt," said Soaries.
In addition to taking on the role of a bank, the partnership will also develop affordable housing. Soaries said that APD Solutions already has a deal with Chase bank to buy six vacant houses, which the partnership would then refurbish and sell for roughly 60 percent of the market value.
Soaries said that they would sell the houses to homeowners looking to downgrade from more extravagant homes they could not afford, as well as first-time homebuyers.
"Some of these people should have never lived in the houses they bought -- that's just the truth," said Soaries.The initial $25 million will leverage another $25 million in funding. Soaries said the money would help about 625 families, and that he hoped to raise $400 million in 2010.
The money for the partnership is an investment, not a grant, which means that APD Solutions expects to receive a return on its initial investment. Irons, in a statement, noted the progress already made by the CJCDC.
"We couldn't be effective if we were trying to do this by ourselves," Irons said.
Soaries stressed that the need to make some money for the investors would not change the work of his nonprofit organization.
"If you just want to make a lot of money, you can buy low and sell high," said Soaries. "We want to buy low and sell low."
Terri Fowlkes, the business development manager for the Northeast for APD Solutions, echoed Soaries.
"There's a waiting list in New Jersey for people seeking affordable housing," said Fowlkes. "We're selling these properties as affordable housing, but still making a profit."
Trenton is one of the eight communities that will be part of a $25 million partnership involving the Central Jersey Community Development Corp. and the Atlanta neighborhood revitalization company APD Solutions to fight foreclosures and the lack of affordable housing in central New Jersey.
"This will have a very positive impact on families in Trenton," said Trenton Mayor Douglas Palmer. "I think it's an excellent model that can be duplicated across the country."
The new partnership, announced earlier this month, would target homeowners facing foreclosure and buy their mortgages from the bank, essentially letting the partnership act as a new bank and renegotiate the terms of the mortgage. APD Solutions specializes in property acquisition, and CEO Vaughn Irons worked as Freddie Mac national director of expanding markets.
The Rev. DeForest Soaries, senior pastor of First Baptist Church of Lincoln Gardens and CEO of the Central Jersey Community Development Corp., said he expected the banks to cooperate with the partnership's efforts.
"We're one of the few agencies that has actually started buying people's homes," said Soaries. "We will buy those loans for the same amount that (banks) were going to sell them anyway."
Soaries hopes that having the partnership own the mortgages will help free up state and federal foreclosure assistance funding. That money, like New Jersey's $25 million Mortgage Stabilization Fund, can only be used if banks agree to write down a mortgage, that is, to reduce the listed value of the loan. Soaries said that commercial banks have been so far unwilling to write down the mortgages.
"When we become the bank, we'll be willing to write down the debt," said Soaries.
In addition to taking on the role of a bank, the partnership will also develop affordable housing. Soaries said that APD Solutions already has a deal with Chase bank to buy six vacant houses, which the partnership would then refurbish and sell for roughly 60 percent of the market value.
Soaries said that they would sell the houses to homeowners looking to downgrade from more extravagant homes they could not afford, as well as first-time homebuyers.
"Some of these people should have never lived in the houses they bought -- that's just the truth," said Soaries.The initial $25 million will leverage another $25 million in funding. Soaries said the money would help about 625 families, and that he hoped to raise $400 million in 2010.
The money for the partnership is an investment, not a grant, which means that APD Solutions expects to receive a return on its initial investment. Irons, in a statement, noted the progress already made by the CJCDC.
"We couldn't be effective if we were trying to do this by ourselves," Irons said.
Soaries stressed that the need to make some money for the investors would not change the work of his nonprofit organization.
"If you just want to make a lot of money, you can buy low and sell high," said Soaries. "We want to buy low and sell low."
Terri Fowlkes, the business development manager for the Northeast for APD Solutions, echoed Soaries.
"There's a waiting list in New Jersey for people seeking affordable housing," said Fowlkes. "We're selling these properties as affordable housing, but still making a profit."