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Money from the Neighborhood Stabilization Program under the Housing and Economic Recovery Act is being used by the city of Aurora in Colorado to buy and rehabilitate houses on REO property listings and then re-sell them.

Already, contractor Steve Snow is rehabilitating five properties bought by the city from REO property listings. Work to rehabilitate the properties is estimated to last for about six months. Then after that, they will be sold to eligible low and middle income homebuyers.

Aurora is the first city in Colorado to use the federal funds allocated to stabilize neighborhoods across the country severely affected by the foreclosure crisis.

The city is set to receive about $4.47 million from the Neighborhood Stabilization Program of the U.S.

Department of Housing and Urban Development. Additionally, the city will also receive $2.5 million funds from the total grant of $53 million given to Colorado.

Since March 3, Aurora has already spent over $1 million purchasing 21 houses on REO property listings. The city replaced the furnaces and sewer lines on foreclosed houses it bought before it puts out a bid for the renovation of the properties.

Community development manager of Aurora, Joseph Garcia explained that eligible homeowners are going to buy homes that are virtually new despite their being on REO property listings.

Furthermore, the federal program also helps improve and stabilize neighborhoods with high foreclosure property rates. However, several residents believed that even without the city doing its best to address foreclosures and stabilize neighborhoods, the communities in Aurora are capable of getting back on their feet without help.

Meanwhile, Snow explained that the system used to renovate the foreclosed properties is designed in such a way that rehabilitation of homes will be done in a fair and consistent way, providing a wide range of affordable, energy-efficient, low-maintenance and well-constructed homes.

On the other hand, Garcia explained that the city established a foreclosure prevention task force that is responsible to identify foreclosure properties that have become eyesores to communities. He said that Aurora’s efforts to curb foreclosures are expected to encourage other real estate developers to purchase and rehabilitate homes in neighborhoods severely affected by the foreclosure crisis.

Metro Home Finders Inc. has been hired by the city to market homes bought on REO property listings. And the homes will be priced based on the purchase and renovation costs or appraised value.

Residents of Colorado are hopeful that the bill signed by President George Bush would offer them the much anticipated break. With Colorado foreclosure listings on the rise, and Colorado being amongst states where the rate of foreclosures is high, the bill is to provide relief for local communities facing increasing foreclosures besides home owners getting relief on their mortgages.

A report by the El Paso County Trustees Office states that depending on how one would add things up, Colorado continued to stay part of the top 3 positions in lists of states with reference to the number of foreclosures. Foreclosures in El Paso, in comparison to the same time period last year, have gone up by 40%.

Among other benefits, the bill will provide incentives to lenders are willing to reduce existing loans of home owners facing problems by up to 10%. Not all home owners in the mortgage process will qualify though. Participation by lenders is not mandatory.

According to Tom Mowle, a public trustee with the El Paso County a singular foreclosure could constitute as a particular individual?s problem, but with communities, like the ones in Colorado Springs, where neighborhoods are facing foreclosures by the dozens, it becomes a collective problem. This, because the houses could end up staying empty for prolonged periods, along with prices in entire neighborhoods coming down.

With this in mind, the bill has also dedicated aid close to $4 billion for local communities which are suffering due to a large number of houses being foreclosed within the same neighborhoods. To help home owners work on refinancing their loans, $300 billion has been set aside. Freddie Mac and Fannie Mae are also to receive help with the Department of Treasury to provide monetary aid to them.

Colorado’s foreclosure hotline?s administrator, Zach Urban, points out that to qualify for the program, the debt to interest ratio of a borrower would have to be more than 31% in order for them to qualify. With participation of lenders made voluntary, the ball to reduce foreclosure listings in Colorado is in their court.

Recording the 7th highest foreclosure rate for the month of June across America, Colorado foreclosure listings are sure giving real estate investors plenty to look forward to.

In June this year, Colorado has 4,878 foreclosures or one foreclosure for every 429 Colorado households, according to RealtyTrac, the Irvine, California based foreclosure properties‘ marketer. Additionally, the foreclosure rate in Colorado was down by 14.5 from June 2007, even though the foreclosure filings across the nation grow by a whopping 53 for June with a total of 252,363 properties.

According to the local experts, RealtyTrac report has overstated the State’s ranking and blames the foreclosure property marketer for making the number of foreclosure listings in Colorado appear to be more. Local experts have also said that Colorado is the only US state that employs a public trustee system as against a judicial process. Meaning, that if a homeowner in Colorado has taken a first as well as second mortgage and has stopped paying on both, it would amount for two foreclosures, despite the fact that it involves just a single owner and house.

On the other hand, the Mortgage Bankers Association report placed Colorado on the 25th position for first mortgage delinquency after what is believed to be an accurate assessment among all the states in the country. RealtyTrac has defended its calculations, and many experts believe that RealtyTrac’s figures help determine the trend in foreclosures in America and how they will affect the homeowners and Colorado foreclosure listings or any other state’s foreclosure listings.

However, with foreclosure listings in Colorado being fed by the regular number of homes going into foreclosure, chances are that this crisis will take a few years more to subside. Of course, it is no secret that Colorado foreclosure listings exist due to the foreclosures that are born to the inability of homeowners to keep up with their monthly payments. Online foreclosure companies in Colorado are a great source of various good foreclosed homes as they have access to the latest Colorado foreclosure listings and can assist you save time and money.