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Read the press release here.

New Foreclosure Buyback Program Seeks to Help Families Keep Their Homes

 Jamaica Councilmen (left to right) Donovan Richards, Daneek Miller and Ruben Wills discuss Foreclosure Buyback Program on Tuesday, July 19, 2016.
Jamaica Councilmen (left to right) Donovan Richards, Daneek Miller and Ruben Wills discuss Foreclosure Buyback Program on Tuesday, July 19, 2016.
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DNAinfo.com/Ewa Kern-Jedrychowska

QUEENS — Dozens of families across the city, who were in danger of being foreclosed on may be able to keep their homes thanks to a new program — the first of its kind in the country — in which the city will buy back distressed mortgages from the federal government, elected officials said Tuesday. 

As part of the Foreclosure Buyback Program, which is now in its pilot phase, the city was able to purchase 24 distressed mortgages, including six in Southeast Queens, city officials announced Tuesday at the Curtis "50 Cent" Jackson Community Garden in Jamaica, one of the neighborhoods that has been hit hardest by the 2008 housing crisis and has still not recovered from it. 

"It is a day of smiles and joy in this battle of foreclosure," said Councilman Daneek Miller, who worked on the program with Councilmen Ruben Wills and Donovan Richards, as well as a number of nonprofits specializing in housing assistance. 

In recent years the U.S. Department of Housing and Urban Development (HUD) implemented changes to its Distressed Asset Stabilization Program, allowing municipalities across the country to purchase mortgages from the federal government to assist people with refinancing their mortgage, officials said.

Historically, homes foreclosed on by the federal government were auctioned off and purchased by private equity firms and hedge funds, Miller said. In many cases foreclosed homes have been abandoned, blighting the neighborhood with squatters, gang activity and drug dealers, officials said.

But under the new program, homeowners will be working on their mortgages with community organizations, which will help them modify loans, making them economically feasible, they added.

"We are now going to negotiate with the homeowners to keep them in their homes and make mortgages manageable," Miller said.

If the homeowners still can't make their mortgages, the homes will be restored by local nonprofit groups and "given back to the community as affordable housing opportunities," according to Miller.

Over the past three years, there were 27,000 foreclosures in the city, including 9,000 in Southeast Queens, according to elected officials.

During that same period of time, the City Council set aside $2 million to implement the program. Additional funding came from the settlements Attorney General Eric Schneiderman won in 2012 from cases against the five mortgage services over foreclosure abuses as well as from Goldman Sachs’ Urban Investment Group, reaching approximately $13 million, officials said.

"This is about ensuring that we take the power out of speculators and investors hands and put real power back into the people’s hands," said Councilman Donovan Richards. "Having these foreclosures in our community not only lowers property values but also [affects] quality of life and safety issues that accompany a lot of abandoned homes ... crime is happening in these homes and there are drug dealers in these homes." 

Local nonprofits said "the stigma of foreclosure" often prevents people from seeking assistance, until it's too late. 

"The most important thing is to let people know that there is help," said Lori Miller of the Neighborhood Housing Services of Jamaica. "They keep this hidden while there is no need to do that and people would often be surprised what can be accomplished as we are working with them negotiating with the banks on their behalf."

Local residents applauded the initiative. Tashie Simpson, who has lived on 165th Street, near the Curtis "50 Cent" Jackson Community Garden, for 8 years said that a house next to her property was abandoned about a month ago.

"Nobody is there, we don't know how long it's going to be abandoned and we don't feel safe," she said, adding that her family is planning to build a fence between the two properties. "So we really appreciate [this initiative]."