BOSTON — As the foreclosure crisis gripping Lawrence deepens, the Patrick administration is giving Lawrence CommunityWorks $1 million to buy foreclosed homes from banks and investors, halting the increase in empty, vandalized houses across the city.
Jessica Andors, deputy director of Lawrence CommunityWorks, said the state money will help restore stability to neighborhoods ravaged by the rise in foreclosures, especially in Lawrence where they more than doubled in the past year.
"This city has been hit incredibly hard by the ... lending crisis," Andors said. "It's going to allow us to aggressively pursue the acquisition of these properties so we can turn them around for ownership and rental housing."
The nonprofit organization will use the money to buy between 12 and 20 homes taken by mortgage lenders and investors through foreclosure. Lawrence CommunityWorks will buy the residences for less than they would be sold for on the market, in some cases less than what is owed on the mortgage.
After sprucing up the properties, the homes would be sold at below-market prices to first-time buyers with low and moderate incomes. In other instances, Lawrence CommunityWorks would continue to own the properties but rent the units to people with low to moderate incomes.
The program will allow Lawrence CommunityWorks to return up to 50 housing units to the marketplace, Andors said.
Lawrence CommunityWorks would have plenty of foreclosed properties from which to choose. Foreclosures in Lawrence increased 116 percent in 2007, according to ForeclosuresMass.com. There were 769 foreclosures in the city last year — the sixth most in Massachusetts — compared with 356 in 2006.
Tina Brooks, undersecretary for Housing and Community Development, said Lawrence was selected for the state award because of the severity of its foreclosure problem.
"Lawrence has been hit so hard by foreclosures," Brooks said. "They were one of six cities for neighborhood stabilization (where) we thought we could help mitigate the risk of foreclosure."
Vacant, foreclosed homes have been targeted by vandals, who strip them of copper and other valuable items. Brooks said the administration's plan would reduce the potential for crime in neighborhoods with high numbers of foreclosures.
"Acquire, reoccupy and minimize the risk of crime and negative social behavior," Brooks said.
North of Boston lawmakers, including Rep. Barry Finegold, D-Andover, lobbied intensely for the money.
"At the end of the day, we all want these properties not remaining vacant and sitting idle," Finegold said. "We want people in them."
Joseph Rich, a spokesman for Sen. Susan Tucker, D-Andover, said the program "is a win-win for lenders and investors for neighborhoods hardest hit by foreclosures."
The state money is part of a five-point foreclosure prevention plan unveiled in Lawrence by the Patrick administration in October.
The administration is urging lenders to give borrowers 90-day notice that the interest on their adjustable rate home loan is rising, encouraging lenders to allow the borrowers to refinance their adjustable rate loan.
Lenders also are being asked to let homeowners in trouble sell the property to the bank for less than what is owed on the mortgage, called a "short sale."
Rep. William Lantigua, D-Lawrence, is pushing for a foreclosure moratorium, giving borrowers behind on their payments enough time for the nation's banks or Washington to come up with a relief plan.
Lantigua, who also asked for the state money for Lawrence CommunityWorks, said he would like to see a moratorium go hand in hand with state aid.
"Families are losing their homes," Lantigua said. "Homeownership is the key to establishing neighborhoods."
