City added to state list to receive possible federal foreclosure aid

LYNN – Mortgages on nearly 400 properties in Lynn were foreclosed since the start of the year, but the city is on a shortlist of communities that may receive foreclosure assistance under a state plan.The list of 39 communities in Massachusetts includes Peabody, Revere, Salem and Saugus among the North Shore towns and cities that would be eligible to share in $43.5 million awarded to the state.The $43.5 million is a share of the $3.9 billion that the U.S. Department of Housing and Urban Development (HUD) is doling out nationally in an effort to stabilize neighborhoods suffering from rampant foreclosures.The money, appropriated by Congress over the summer, can be used to buy, renovate and redevelop foreclosed homes.James Marsh, the city development director, said the funds, which must obtain HUD approval, are eagerly anticipated. The money can also be used to demolish dilapidated properties and to create so-called land banks for managing vacant land. The initiative was also designed, in part, to assist low- to moderate-income homebuyers with down payments and closing costs, he said.The foreclosure numbers are sobering. From the start of the year through Oct. 31, 1,151 foreclosure deeds were recorded in the eight North Shore communities that would be eligible for the funding. The numbers represented an increase of 86 percent over the same time span during 2007.According to information provided by the Boston-based The Warren Group, which tracks foreclosures and publishes real estate data, there were 399 foreclosures in Lynn since the year began. In Revere, 166 were recorded. Peabody had 64, Salem 63, and Saugus 54.Lynn is part of a group of 10 communities statewide that could be eligible to apply for a combined $6.8 million.Just exactly how each community would use the funds, if received, remains uncertain, though some have indicated at property renovations or the purchase of buildings that could be stabilized by non-profit groups and converted to affordable housing.”These funds will greatly enhance our already aggressive efforts to lift up the neighborhoods across Massachusetts that are struggling with the harmful effects of wholesale foreclosures,” said Gov. Deval Patrick.The HUD funding stems from the Housing and Economic Recovery Act of 2008. The 39 communities on the Massachusetts shortlist are those identified by the Patrick Administration.