Foreclosure-home auction geared to 1st-time buyers

by Catherine Reagor The Arizona Republic Jul. 28, 2010 12:00 AM

Prospective buyers trying to purchase Phoenix foreclosure homes to live in will have first dibs on 135 houses that mortgage giant Freddie Mac is auctioning off next month.

Buyers, particularly first-timers using government incentives and mortgage financing, have had a tough time competing with investors for inexpensive foreclosure homes in metropolitan Phoenix over the past 18 months. This auction, Aug. 7 at the Phoenix Convention Center, is geared toward buyers who plan to live in the houses.

HomeSteps, the real-estate-sales unit of Freddie Mac, is offering to pay qualifying buyers up to 3 percent of their closing costs. Almost a third of the foreclosure homes going on the auction block are set aside for first-time buyers using federal funds from the Neighborhood Stabilization Program.

In spring 2009, Arizona and several metropolitan Phoenix cities received $121 million in Neighborhood Stabilization funding to help the areas hardest hit by foreclosures. Much of the funding has gone toward providing closing costs and funds to help first-time homebuyers purchase and fix up foreclosure homes. A portion of the Neighborhood Stabilization funding that the Arizona Housing Department received will go to helping buyers at the Freddie Mac auction.

Foreclosures dipped earlier this year, prompting hope that the crisis was easing. But foreclosures in the Phoenix area climbed by almost 20 percent in June, according to the Information Market.

"Owner-occupants are the key to strengthening neighborhoods in the Phoenix market," said Jim Park, CEO of New Vista, which is working with Freddie Mac on the auction.

A seminar for prospective buyers is scheduled at Neighborhood Housing Services of Phoenix on Tuesday. Prospective Phoenix buyers can check out the homes at auction .com/phoenix.

Freddie Mac has held similar foreclosure-home auctions in California and Las Vegas.




Foreclosure-home auction geared to 1st-time buyers