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County drafts foreclosure rescue plan

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BY CARL ORTH

SUNCOAST NEWS ASSISTANT EDITOR

Published: October 25, 2008

NEW PORT RICHEY - County officials decided this week against branching into the real estate business and buying foreclosed homes.

Instead, Pasco commissioners opted for spending most of $20 million in federal aid to help home buyers purchase and fix the abandoned homes.

"We must act swiftly to turn the tide," Greg Armstrong, president of the West Pasco Board of Realtors, commented before commissioners. He was backed by more than 50 real estate agents and brokers in the audience.

The crisis continues with some 100 foreclosures per week in Pasco, Armstrong pointed out.

"We are in extraordinary times and it calls for extraordinary thinking," Armstrong remarked.

Pasco County qualified for the 17th-largest amount in the nation under the Neighborhood Stabilization Plan through the U.S. Department of Housing and Urban Development, George Romagnoli, the county's community development manager, reported.

Pasco's share of $19,495,805 is more than the combined shares for San Diego, New Orleans, Boston and Nashville.

Commissioner Michael Cox introduced the proposal favored by the Realtors to shift most money into down payment assistance or other types of aid for individuals. Government workers and teachers would get special attention since those groups often cannot afford homes.

To be eligible for up to $20,000 in help, an individual could earn up to $47,520, or a family of four could have household income up to $67,800.

Speed is of the essence, county officials agreed.

"That's a pretty alarming map," Cox said to Romagnoli about a HUD map of Pasco showing the Foreclosure Risk Score for the next 18 months. A large red swath covers much of West Pasco, indicating 10 percent of homes or more could fall into foreclosure.

The original concept would have spent the bulk of the federal money toward buying some 182 "worst of the worst" foreclosed or abandoned homes, Romagnoli said.

The eyesores drag down the values of other homes in neighborhoods, he remarked.

Cox was concerned the foreclosed homes would be removed from the property tax rolls if the county bought them. Romagnoli explained the county would have enlisted nonprofit agencies to buy the homes on behalf of the county. That way taxes would still be paid on the properties.

Still, 182 homes would be a relative drop in the bucket of the foreclosure problem, Cox said, while down payment assistance could help several thousand Pasco residents.

The county will hold public hearings by next month, submit its plan to HUD by Dec. 1 and might receive funds by the end of December. Commissioners hope most of the money can be spent within 10 months after the federal aid arrives.

Banks and other lenders must agree to stricter standards on home loans through this program, Romagnoli noted.

County Administrator John Gallagher said the safeguards will help avoid another round of subprime loans to overextended buyers "so history doesn't repeat itself."

Carl Orth can be reached at 727-815-1068 or corth@suncoastnews.com.

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