The foreclosure crisis, which has caused around 4 million people to lose their homes, has wreaked havoc on many neighborhoods. Foreclosed homes drag down property values when they swell the housing supply and sell at below-market rates. These bank-owned homes also can erode the character of communities by attracting all manner of blight as they sit unoccupied.

The foreclosure scourge is especially acute in minority neighborhoods, according to a recent report by the National Fair Housing Alliance, which found that banks take much better care of their foreclosed properties in predominantly white neighborhoods than those in minority communities.

Some nonprofits are taking robust measures to combat the epidemic of foreclosures, also known as REO (for "real estate owned") homes. Three of them, Rebuilding Together, NeighborWorks America and the National Community Stabilization Trust, recently announced a new partnership designed to ramp up efforts to revitalize clusters of bank-owned foreclosures, highlighting what appears to be a growing focus on maintenance as a means to mend the housing market.

NeighborWorks America, which coordinates with affiliates that were awarded more than a total of $500 million from the $7 billion Neighborhood Stabilization Program fund in 2010, is teaming up with local affiliates of the nonprofit Rebuilding Together to train the groups to rehabilitate vacant foreclosed homes and sell them to low-income Americans.

The National Community Stabilization Trust, which was created in 2008 to facilitate the transfer of bank-owned homes to nonprofits, will work with the two groups to identify homes that will receive repairs under the program.

"This is a unique effort in that it's focused on transforming vacant and dilapidated properties into safe and affordable homes in the communities they serve," Rebuilding Together spokesperson Janice Walker told AOL Real Estate.

The announcement of the collective nonprofit initiative marks one of the latest attempts to reduce the strain of neglected foreclosed homes on neighborhoods and the housing market. Nonprofits, banks and the government use rehabilitation to combat REO blight, and sometimes provide affordable housing to low-income Americans after the homes' restoration. They've appeared to bolster their efforts in recent months in order "to figure out how to move upstream," says Ascala Sisk, senior manager of Stabilization Strategies at NeighborWorks. And there are "many different structures" to use to accomplish this.

For nonprofits, the Neighborhood Stabilization Program plays a key role in rehabilitation efforts, furnishing them with the necessary funds to invest in mass-scale neighborhood revitalization, which often takes the form of REO rehabilitation.

The Department of Housing and Urban Development administers the fund, which has received $7 billion in appropriations so far, Sisk says. And the National Community Stabilization Trust, one of the three partners of the new nonprofit initiative, helps put these funds into action by "providing the only nationwide platform that gives local housing providers a clear, consistent, and straight path to acquire foreclosed and abandoned properties from financial institutions," the National Community Stabilization Trust's website says.

NeighborWorks America affiliates across the country helped homeowners rehabilitate more than 8,700 homes and 43,000 rental homes in 2011, group spokesperson Douglas Robinson says.

With NeighborWorks guidance, Rebuilding Together, which purportedly completes 10,000 projects that assist low-income homeowners per year, is now beginning its first foray into REO rehabilitation. Rebuilding Together's plan is to rehabilitate REOs and sell them to community members who make between 80 and 120 percent of the local median income, and also provide them with homeownership education, Walker says.

Since the partnership has just formed, Rebuilding Together says that it can't provide an estimate of how many homes the program will impact.

Coinciding with the two nonprofits' newly formed partnership is another program launched in February that takes an alternative approach to combating REO blight. Under the REO Rental Initiative, the Federal Housing Finance Agency will sell Fannie Mae and Freddie Mac-owned REO properties in bulk to private investors, if they agree to rent the properties.

By mandating that the properties be converted into rentals, the program aims to lower rents where foreclosures have hiked up rates and provide the homes with caretakers who are motivated to maintain them, namely, the investors themselves. After a few years of renting (and maintaining) the once-dilapidated properties, investors are expected to push the homes onto the market and sell them.

The program has its critics, including the National Association of Realtors. Detractors say that selling in bulk to investors could chip away at home prices (private investors often buy homes at discounts because they pay banks in cash, not borrowed money) and encourage prospective buyers to rent, instead of buy.

"Over time, servicers have adjusted their models to accommodate selling properties quickly rather than holding onto potentially wasting assets," the 2010 Federal Reserve report on neighborhood stabilization says. "At times this may mean selling to a cash investor immediately, at a slightly lower price, instead of waiting for a prospective owner occupant to receive financing for the purchase."

Bank of America has launched a similar pilot program, called the "Mortgage to Lease Program," that forgives the outstanding debt of some homeowners headed toward foreclosure and offers them the opportunity to rent their homes from Bank of America in exchange for handing over the titles to the bank. If homeowners opt for the program, they may rent for up to three years.

"If this evolves from a pilot into a more broadly based program, we also see potential benefits from helping to stabilize housing prices in the surrounding community and curtailing neighborhood blight by keeping a portion of distressed properties off the market," Ron Sturzenegger, a servicing executive of Bank of America, said in a statement.

For all the two programs' possible shortcomings, they reflect a growing interest across the real estate industry in finding innovative ways of ameliorating the housing crisis by attending to the REO threat, Sisk says.

"And that's great to see," she says.

CORRECTION:

An earlier version of this story misidentified a Rebuilding Together spokesperson. The spokesperson's name is Janice Walker. The story also incorrectly stated that Rebuilding Together's rehabilitation plan is to restore REOs and sell them to community members who make between 80 and 20 percent of the local median income. The income range is actually 80 to 120 percent of the local median income.

See also:
Foreclosure-Review Offer Getting Few Takers, Report Says
How to Avoid Foreclosure: Steps You Can Take to Keep Your Home
Home Prices May Withstand Foreclosure Wave

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Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
See celebrity real estate.

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In the wake of the housing crisis, the number foreclosures has skyrocketed as depressed real estate prices and subprime mortgages continue to push millions of borrowers into default. As of Dec. 31, banks owned nearly 700,000 homes. Hordes more are on pace to join that enormous inventory, with 700,000 homeowners in some state of foreclosure.

Jumping nearly fourfold since the peak of the housing boom, foreclosure sales accounted for 20 percent of total sales in the country between July and September of last year. While the vacant properties represent loss and hardship for many, the massive supply might offer some current buyers the deal-of-a-lifetime.

In fact, according to data from RealtyTrac, on average, foreclosed homes sold for 34 percent below their market value between summer and early fall of last year. In some pockets of the country, that number was significantly higher. The foreclosure discount in Trenton, N.J., for example, clocked in at a staggering 67.89 percent.

Using data calculated by RealtyTrac, AOL Real Estate brings you a mix of houses in cities that offer some of the steepest foreclosure discounts in the country.

Click the gallery below to see everything from foreclosed mansions (pictured above) to first-time-homebuyer gems.

Also see:
Report: Foreclosures Down, But Discounts Abound
Open Houses of the Week: Jan. 27-29

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Find out how to calculate mortgage payments.
Find homes for sale in your area.
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LEHIGH ACRES, Fla. -- At Our Daily Bread Food Pantry, the conversation often centers on real estate. Once taboo details -- home values and what people paid for their properties -- are casually discussed, and there appears to be little shame in walking away from a mortgage or fighting the bank on a foreclosure.

With Florida's Republican presidential primary just days away, the talk has turned to politics. At the food pantry and throughout hard-hit Lehigh Acres, frustrations over the housing crisis and the federal government's seeming inability to help has turned into apathy at best, and rage, at worst.

"They destroyed Florida," said 69-year-old Bobbie Ruggieri, a food pantry volunteer.

Lehigh Acres is about 30 miles east of the Gulf of Mexico's sandy beaches in southwest Florida, slightly northwest of the Everglades. Once sleepy and rural, the area boomed high and hard between 2003 and 2007. The population doubled to about 65,000, mostly from service and construction workers living large off the success of the area's new housing. The fall came just as fast. By 2008, Lehigh Acres and the entire Fort Myers area had the nation's highest foreclosure rate. Currently, one in every 96 homes is in foreclosure.

Here and likely elsewhere, no politician is spared the fury over the housing crunch. Experts say neither President Barack Obama nor any of the Republicans who want to challenge him in November have solutions for falling prices, depressed construction and waves of foreclosures.

Obama said this week that he wants to help struggling homeowners refinance their mortgages. His GOP opponents generally say the government should not interfere in the housing market. But a growing number of experts are advocating a bolder approach to provide relief to the 11 million homeowners in the United States who owe more on their mortgages than their houses are worth.

Republican candidate Mitt Romney stood in front of an empty, foreclosed home Tuesday and told a small crowd that he would encourage banks to work with homeowners. He also defended the banks, saying they also were hamstrung by the crisis.

"In this case, it's because of the banks," Romney said. "Well, the banks aren't bad people. They're just overwhelmed."

Kit Bock, who owns a landscaping company, listened. He said his company has lost $10 million in business in the past decade. It once employed 160 people but now just 30 are on the payroll.

Bock said he thinks he'll vote for Romney because of his success as a businessman. But Bock said he's not wildly enthusiastic about any candidate.

"What I'd like to hear from a candidate is not how bad things are and how everyone else hasn't done their job. I'd like to hear specifically what they can do to change things," he said.

Food bank pantry manager Karen Balch was too busy handing out deli meat and bread to the needy to go see Romney. She wishes that he or former House Speaker Newt Gingrich or any other national politician would drop by.

"They're all good people here," sighed Balch, who started volunteering when she lost her job at a flea market. "Hard-working people. It seems like everyone you talk to here in Lehigh is losing a home."

Walt Romberg, another pantry volunteer, bought a $139,000 home with his wife in 2004. They put down $75,000 after selling a business. It took them a while to find jobs, then they lost them. They nearly went into foreclosure, and would have, if not for a nonprofit that's helping pay their mortgage for 18 months. The home is now worth less than $55,000.

Romberg said the nation's problems started under President George W. Bush, but he doesn't blame Bush entirely. He also doesn't blame Obama, but thinks Obama "hasn't helped all that much, either." Romberg said he was thinking of voting for Romney because he's "created some jobs, like Staples," referring to the office supply chain that Romney's former company, Bain Capital, financed.

Ruggieri, who also volunteers as a nurse at a free medical clinic with 200 people on its waiting list, said she won't vote for Romney.

"I'm mad that he blamed Obama for this," she said.

Ruggieri doesn't see the housing crisis as any one politician's or party's fault, although she does have some choice words for the banks. But she's one of the lucky ones in Lehigh Acres: She and her husband bought a foreclosed home for $33,000 in 2009, once worth $211,000.

Daniel Bozarth, who rents a home a few streets away from where Romney stood, applauded his remarks. The 26-year-old, who is collecting $160 a week in unemployment after losing his job repairing motorcycles and ATVs, also doesn't blame Obama. He also likes that Romney made millions during his career.

"If we were to have someone like that, that's what we need," Bozarth said. "We need someone to get us a lot of jobs. I think we've hit rock bottom."

Another neighbor, Michelle Wheeler, a 44-year-old staunch Obama supporter, refused to attend Romney's event.

"This is not a situation that can get fixed in four years," said Wheeler, who was laid off from her job at State Farm Insurance after injuring her knee. Without health insurance, she can't get surgery. Without surgery, she can't walk much or work.

She is angry that Republicans, and some Democrats, haven't supported Obama's ideas.

"I blame anyone who is opposing him," Wheeler said. "Just work with the president."

Across town at Joe's Cafe, owner Joe Golio shook his head when asked whether any Republican candidates can help Lehigh Acres. Business has been tough the last four years and he can't afford to move. His home, worth $250,000 four years ago, is now valued at $67,000, he said.

His son, James, waits tables at the restaurant. His home is worth $27,000 and he owes $117,000 on the mortgage.

Neither man blames Obama. But neither really wants him to stay in office. And they aren't sure any of the GOP candidates would be any better.

"They're all cowards," James Golio said.

Added his father: "I don't like to listen to politicians. You hear the same thing from everyone. They're short on detail. I just want the truth, whatever it is."

Copyright 2012 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

Also see:
Candidates Put Housing Crisis at Fannie and Freddie's Doorstep
Obama State of the Union Plan Inadequate for Housing?

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By Les Christie, CNNMoney

NEW YORK -- The Obama administration is taking another swing at improving its main foreclosure prevention program.

The administration said it was expanding eligibility for its Home Affordable Modification Program, known as HAMP, to borrowers with higher debt loads and tripling the incentives it pays banks that reduce principal on loans.

The administration also said it would offer incentives to Fannie Mae and Freddie Mac to reduce principal on loans. Previously, the government had only offered incentives to private lenders and banks. The program was also extended to December 2013. It was initially set to expire at the end of this year.

The changes were announced in a joint press conference held by Housing and Urban Development Secretary Shaun Donovan, Assistant Treasury Secretary Tim Massad, and White House National Economic Council Director Gene Sperling on Friday afternoon.

Originally designed to help some 4 million mortgage borrowers when it was first introduced in February, 2009, HAMP has helped fewer than 1 million homeowners.

With these changes, HAMP is turning into an "all of the above strategy to help responsible homeowners lower their costs and stay in their homes," said Gene Sperling, the Director of the National Economic Council, who also took part in the press conference.

Here's a rundown of the new changes:

Expansion of eligibility: HAMP was designed to bring the debt ratio of mortgage borrowers down to 31 percent of their incomes. Those whose mortgage payments were already below that level had been ineligible for a modification. They may qualify now. The new guidelines will allow for a more flexible approach that takes other debt into account when calculating debt-to-income ratios.
Extension of eligibility to owners of rentals properties: The old HAMP rules applied solely to owner-occupied homes but now those who own rental properties may also qualify for a HAMP modification.
Triple balance-reduction incentives: The new HAMP will pay between 18 cents and 63 cents for every dollar that lenders take off the mortgage principal, up from between 6 cents and 21 cents.
Pay Fannie and Freddie the same incentives: Currently, Fannie Mae and Freddie Mac do not offer principal reduction plans as part of their HAMP modifications. To encourage this assistance, Treasury said it will pay the same principal reduction incentives to Fannie Mae or Freddie Mac if they allow servicers to forgive principal in conjunction with a HAMP modification.

While the new changes could greatly expand the number of homeowners who receive help from HAMP, it could invite controversy. Subsidizing real estate investors with taxpayer money in a time of rising rents doesn't makes much sense to Anthony Sanders, a real estate professor at George Mason University, for example.

Yet, HUD Secretary Shaun Donovan said that it doesn't matter whether the house next door to you is occupied by a tenant or an owner.

"If the house goes vacant, the value of your house goes down $5,000 or $10,000 that day," he said. "These are major problems for homeowners."

Following the press conference, the Federal Housing Finance Agency, which oversees Fannie and Freddie, issued a statement that said it would consider the changes to the HAMP program.

However, it noted that an analysis it recently conducted found "that principal forgiveness did not provide benefits that were greater than principal forbearance," signaling that the housing authority may not support reducing the principal on loans as a way to help homeowners.

No new funds need be allocated for HAMP's expansion. Since less than $10 billion of the $29 billion set aside for the program has been spent so far, said Timothy Massad, Assistant Secretary for Financial Stability at the Treasury Department. The administration would not hazard a guess at how many more borrowers the expanded program would help.

The changes in HAMP do not take effect until the end of April, but a Treasury spokeswoman said any struggling homeowners should reach out and seek foreclosure prevention counseling immediately. That way, they can learn their options, which could include trying to hold on until the new HAMP is ready.

More from CNNMoney:
Has Obama's Housing Policy Failed?
Foreclosures: America's Hardest Hit Neighborhoods
Facts on Obama's Tax Record

Also see:
Freddie Mac Bet on Homeowners' Misery, Report Says

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Tracy Morgan is no stranger to controversy, but it's not often that a comedian can count his mother among his biggest critics.

The "30 Rock" funnyman is being accused of not helping to save his mother from foreclosure on her Ohio home, the New York Daily News reports.

Morgan's mother, Alicia Warden, told the Daily News that she owes approximately $25,000 on her home. After an apparent spat with Warden, in which Morgan accused his mother of speaking with the media behind his back, she claims that he reneged on his offer to help with the mortgage. Instead, he is currently offering a $2,000 "one-shot deal," Warden told the paper.

If Warden does not make a minimum payment toward the mortgage by Feb. 23, the lender will initiate foreclosure proceedings.

"He's never been a nice person," Morgan's younger sister, Asia, told the Daily News. She described her brother as a "d--- bag," who has gotten worse with fame and fortune. Morgan is worth an estimated $18 million.

Of course, Morgan's off-screen behavior is regular grist for the gossip mill, so much so that it's melded with that of his Tracy Jordan character on "30 Rock." Less than two weeks ago, Morgan passed out at a Sundance Festival awards ceremony shortly after giving what some called an incoherent acceptance speech, reported TMZ.

Neither drugs nor alcohol were found in Morgan's system, and a spokesman for him claimed that it was high altitude and fatigue that caused the spell, the San Francisco Chronicle said.

Last summer, Morgan was asked to apologize by the Gay & Lesbian Alliance Against Defamation, when he said during a standup routine that he would stab his son to death if he was gay. Morgan issued the apology, and the topic was lampooned in a recent episode of "30 Rock."

When, if ever, this episode in Morgan's real-life family drama becomes sitcom fodder remains to be seen.

Also see:
Songwriter Denise Rich Lists New York's Most Expensive Co-op
Chef Gordon Ramsay Bites on $6.75 Million Bel-Air Home
Joe Montana Drops Home Price by $14 Million

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