Atlanta Anti-Foreclosure Program Slow and Tricky ATLANTA, GA (WABE) - A recent audit by the U.S. Solicitor General says that Atlanta is dragging its feet in spending money to fight foreclosures. The December report says the city has expended only a small fraction of what it was awarded to buy, fix and resell homes. City officials say things got off to a bumpy start, but insist they'll be able to complete the project on time.

Masharn Wilson has been hard at work for her team of realtors. Since they won a contract in September to buy, renovate and market homes, she's gone out every morning to look at foreclosures. Walking into a single-story bungalow in Peoplestown, she calls out as the creaky door swings open.

"You have to hope nobody talks back to you," Wilson says. The house, near Turner Field, is listed for $55,000. Wilson says that's far from the right price, given how much work it needs.

"This house has structural issues," she says. "It is leaning to the right, as you can tell or feel."

In fact, the tilt is so pronounced that all the drawers in the kitchen have slid open. There's also mold on the ceilings. Wilson says the house will need to be jacked up and repainted.

All the same, Wilson makes an offer later that day for $35,000 because she and her team have a redevelopment plan for this street. The group, called Real Estate Alliance Partners, is watching several vacant homes, which aren't yet listed as foreclosures. When the houses are listed, the group hopes to snap them up and get stable homeowners inside. But it will be a challenge.

Since about a dozen realtor and development groups got the go-ahead to start buying homes in early fall, Wilson says the market turned competitive.

"Investors are trying to beat us," she says. "So often times, we run into situations where a really good home is going to highest and best."

James Shelby, Atlanta's Commissioner of Planning and Community Development, says all the groups trying to acquire homes have run into that problem. The other challenge has been the extra hoops that the deals have to go through because of federal rules.

"The federal government requires that we do appraisals on every piece of property that we purchase," says Shelby. His department oversees the $12.3 million award that Atlanta got from the federal Department of Housing and Urban Development.

"Then we have to offer one percent below the appraised value," Shelby added, "which is a little difficult for us, because investors can offer any kind of price above the appraised value and acquire the properties."

In some cases, NSP partners lost out even when they made higher bids, because sellers didn't want the hassle of appraisals or environmental reviews that the feds require. Several Atlanta real estate groups estimate for every ten offers they make as part of the program, they only get one.

And then there's the question of whether people will actually be able to buy the homes. One 3 bedroom, 2.5 bath home that Wilson's group acquired in Peoplestown, has made it all the way through the pipeline, and has a buyer. Wilson says it was sold for $150,000.

"And this individual is getting, because of her income, she's eligible for about $20,000 in downpayment assistance," says Wilson.

That kind of assistance is very helpful, she added, because as the NSP homes hit the market at half (or even less) of what they had been at the peak, the property taxes still reflect the inflated prices. So on the $150,000 home, taxes could be as high as $5,600 a year.

But the home that Wilson's group sold is the only one to make it past the point of sale in Atlanta's program so far. The problem is, the program is already halfway done. The city wants to acquire 300 homes by September.

A HUD spokesperson says Atlanta isn't the only city behind the curve, and admits the September deadline may be too ambitious. Congress may consider revisiting NSP to extend the deadline.
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