L.A. starts buying up foreclosed homes with federal aid

The funding itself is a small dose of medicine for a massive problem. Los Angeles saw more than 21,000 foreclosures in 2007 and 2008, and many of them are still on the market. Even if it spent every cent of its funding on buying homes and bought them at an average price of $100,000, the city would be able to buy only 330 homes.

On 82nd, across the street from Lubiano, the duplex the city is buying went into foreclosure in June 2008.

Anthony Chatman, the real estate broker hired by the bank, wasn't able to put it on the market, though, because the renters had stopped making payments but refused to leave. They were evicted in February.

Their landlord bought the home for $470,000 in August 2006 with 100% financing at a variable interest rate from Washington Mutual Inc. The home had sold just five years earlier for $60,000. Chatman was planning on listing the home for $179,000 in March when he was contacted by the city. They are still negotiating a sale price, he said.

City officials have been working with Wells Fargo & Co., which is managing the loan on the house, to find properties and make bids on them, Marquez said. The homes will be bought through a nonprofit agency the city has set up with Maryland-based Enterprise Community Partners, one of the country's largest low-income housing developers.

Inside, the duplex looked as if it had never seen a vacuum cleaner. In the larger of the two units, the once-aquamarine carpet was now mostly tarry black and brown, covered in part by an equally stained rug showing the signs of the zodiac.

Despite bars on every window and door, the house had been broken into in recent weeks, the heaters ripped from the walls. Next door, another bank-owned property was covered in gang graffiti.

Up the street, Ana Ruiz, 33, said she hoped the city would bring in enough new owners to make a difference. She said she feared for her safety and that of her two daughters because the neighborhood had become a magnet for crime.

"At night this place is pretty scary," Ruiz said in Spanish. "We have the police coming and the helicopters coming. . . . Unless something changes, I am going to move."

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william.heisel@latimes.com

Times researcher Scott Wilson contributed to this report.