This is very innovative idea. It’s a win-win situation. It will be very interesting to see how this resolution is implemented and the results.
San Francisco’s foreclosure rate is very low relative to the rest of the nation, and has dropped considerably since the height of the mortgage default crisis. But foreclosure rates in the city’s southern and southeastern neighborhoods remain higher than the citywide average, according to a report issued by the San Francisco Controller’s Office in February.
On Tuesday, the Board of Supervisors unanimously approved a resolution in support of an innovative strategy for stabilizing neighborhoods where homeowners face a higher risk of foreclosure. Typically, pools of delinquent mortgages are sold off to private equity firms and hedge funds.
The resolution calls for joining with other cities to encourage owners of at-risk mortgages, such as Fannie Mae and Freddie Mac, to sell off the distressed mortgages to nonprofits and community development financial institutions (CDFIs) instead.