TARP Funds Demolish Homes in Detroit to Lift Prices: Mortgages

March 07, 2014 — Brian Louis and Jeff Green - Bloomberg
In Flint, once a thriving auto-industry hub, excavators with long metal arms and shovels have begun tearing down 1,500 dilapidated homes in an attempt to lift the housing market. The demolitions in this Michigan city of about 100,000 people are part of the stepped up efforts by officials in several Midwestern states to rid their blighted neighborhoods of decayed housing that’s depressing prices. The funding for the excavator work comes from a surprising source -- the Hardest Hit Fund of the Troubled Asset Relief Program, or TARP, created in 2008 to stabilize to the financial system. The $7.6 billion Hardest Hit Fund was intended to help troubled property owners avoid foreclosure and keep their homes. As foreclosures fall in most parts of the country, the fund is using the unspent $3.2 billion to remedy the crisis of abandoned homes. In Detroit alone, 70,000 dwellings, or about 19 percent of the total, may need to be torn down, according to the city. Mr. Louis may be contacted at blouis1@bloomberg.net. Mr. Green may be contacted at jgreen16@bloomberg.net. Read the full story...
Reprinted courtesy of Brian Louis and Jeff Green, Bloomberg