Hartford Courant Editorial on Federal Foreclosure Funds

Unfair Allocation
Foreclosure Aid • State plan would direct federal money to too few towns
Published: November 30, 2008

U.S. Rep. Joseph D. Courtney is on firm ground in objecting to the way state officials plan to allocate $25 million in federal funds sent to Connecticut to shore up neighborhoods hit hard by home foreclosures and abandonments.

Under a plan drafted by the state Department of Economic and Community Development, the lion's share of the money would go to only seven of the state's largest cities — none of which are in Mr. Courtney's distressed district in eastern Connecticut. Under the federal law, states or localities are to use the money to buy foreclosed homes and rehabilitate them to restore property values in struggling neighborhoods.

It appears that the DECD draft proposal would allocate the money based on the largest numbers of foreclosures and delinquencies and not, as the law seems to require, on the greatest percentage of foreclosures in areas of need. Mr. Courtney noted last week that towns like Plainfield, which is in his district and has the highest rate of foreclosures in the state, are out of luck under the DECD proposal.

Towns with high foreclosure rates are every bit as fragile as big cities with higher raw numbers of foreclosures. Mr. Courtney was right to urge Gov. M. Jodi Rell to "reallocate the money so that eastern Connecticut towns are able to rebound from the foreclosure crisis as well."

A more equitable distribution of the Neighborhood Stabilization Program money would include cities with high numbers of foreclosures as well as smaller municipalities with the highest foreclosure rates.