Lenders Give Locals Chance to Buy Foreclosures Ahead of Investors

Beware, real estate speculators: Your advantage is waning. The Obama administration announced today that major banks have agreed to allow local governments and nonprofit groups to purchase foreclosed properties before private investors. Congress granted $7 billion to enable local officials to acquire such properties with the intent of renovating or redeveloping them, and thus allow communities to stabilize themselves through reinvestment. The nonprofit National Community Stabilization Trust will compile data on available properties and advise communities about which ones best suit their needs. The largest mortgage lenders in the country, including Bank of America and Wells Fargo, have signed on to the agreement.