States divert foreclosure prevention money to demolitions

The Treasury Department has changed the rules on the Hardest Hit Fund, a program meant to help people hit by the housing crisis stay in their homes, allowing states to use some money from the $7.6 billion foreclosure prevention program to demolish homes instead.

The first five houses came down last week, in the Marygrove neighborhood of Detroit.

“It’s a prayer being answered,” says Velma Lewis, who moved to the neighborhood almost 30 years ago. Back then, the streets weren’t dotted with abandoned homes. No one kicked in her door if she left town, like they do now.

“When I moved here, it was a beautiful neighborhood. I never thought that I would retire to this here. So I am elated,” she says.

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