Foreclosures Mounting at Record Levels Since the Great Depression

One local city gets a federal bailout, putting them in the housing business.

(PORT ST. LUCIE) The city is not only spending tens of thousands of dollars to clean it up by cutting yards and securing neglected homes.  Port St. Lucie city leaders soon will be spending millions of dollars to buy up these nuisance properties.

The city is still one of the fastest growing in the country, but so many of these homes are not filled with families, but empty from investor speculation.

"It's got a beautiful house on this side, beautiful house on this side..and it's just awful." said neighbor Elizabeth Penny of an overgrown mess next door.

The boom in Port St. Lucie is now a bust. Neighbors are left with the eyesores of the housing market crash.    

"So the owner knows the house looks awful?" "Right." "And he just doesn't care." "Yes." said neighbor Sal DeCarlo. But federal funding for repairs and clean up is just the beginning of the solution called the Federal Neighborhood Stabilization Program. Assistant City manager Greg Oravec says the program has the city buying up the eyesores.

"I think that you'll see the city acquire a number of foreclosure properties--as many as funding will allow," said Oravec.

In all, Washington mandated 4 Billion federal dollars sent to cities hardest hit by the housing crisis. "An abandoned property invites problems." said Oravec. Port St. Lucie grabs $13.5 million dollars.  It's enough to buy up 112 properties.

"It's be a significant number of homes taken off the market. And as they are taken off the market they'll be maintained, then put back out on the market for qualifying homeowners." said Oravec.

Once the city gets ownership of all of these homes, they say they'll maintain all of the properties, and eventually sell them when the market rebounds. The federal funding is not yet in the city of Port St. Lucie's hands. Oravec says they hope to get the funding in place to begin buying up properties by the new year.

Palm Beach County received similar funds of 27.7 million dollars. West Palm Beach was awarded $4.3 million. No word if they plan to buy up foreclosures as well.

Governor Charlie Crist's office applauded the funding, saying "These targeted funds will be used within local communities to purchase foreclosed homes at a discount and to rehabilitate or redevelop them in order to respond to rising foreclosures and falling home values."