Moratorium On Foreclosures Clamped Down To Ease Flood Related Problems

Moratorium on foreclosures has been clamped down to ease flood related problems

. Prior to the floods of 1st May that wrought havoc in Shelby County, many residential houses became foreclosures in Memphis. They had figuratively speaking gone underwater "" the worth of the properties being less than the loan due amounts. The economic health of this area worsened with the coming of the floods in May.

Shaun Donovan the secretary of HUD said that the disaster prior to the floods had been "man made". Donovan and the Gary Locke, the Secretary of US Commerce was surveying the damage done by the floods in Memphis region. Donovan stressed that the pivotal focus of the administration was "to stabilize the housing market." He quipped and remarked to the comments of Obama that "we have to be able to walk and chew gum at the same time."

A moratorium running into ninety days was announced by Donovan. It would be effective for all lenders who had insured their loans with Federal Housing Administration in the flood affected regions.

More positively $15 million was given as grants coming from Community Development Grants (CDBG) of the Federal Government in this Memphis region would be diverted for efforts in flood relief.

Mayor Keith McDonald of Bartlett warned Donovan about the apprehensions residential home owners have about long term funding. He said that they feared that this would somehow be treated as "a loan against their house." He said that he was having to explain that this was not a way for the administration "to get a lien" on their homes prior to evicting them.

Donovan promised that the Obama government would take a more flexible attitude towards the CDBG fund"s use. He also wanted to let those getting the grant to know that these were nothing more than grants if they continued to reside in their homes. He explained that the programme was not aimed at "long-tern recovery". It was meant for more adjustability. He said, "I think part of it is history. I think part of it is the program doesn"t have the flexibility it needs to be able to reach folks in ways that makes them confident. That is part of what we"re working on."

The CDBG funds have meanwhile been distributed to the local administration for various projects. But now the plans would have to be altered because of changed situation. Donovan stressed that it is the local community that would have to take the decision considering the altered circumstances of the area facing natural disaster.

by: James Carter

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