June 9, 2012; Source: Berkshire Eagle
NPQ has often relayed the experiences of Boston Community Capital Corp., which, for three years now, has offered relief to delinquent mortgagees in the form of an opportunity to repurchase their homes at current (i.e., lower) market value. In 2009, Boston Community Capital Corp. began the Stabilizing Urban Neighborhoods (SUN) program in Boston, purchasing foreclosed homes from banks and selling them back to the original owners at a reduced price reflecting today’s abated home values, consequently reducing the “new” owners’ payments of principal. Now, it seems there’s a possibility that this innovative program may expand into new territories.
Last week, the nonprofit community development institution met behind closed doors with Berkshire County housing officials in Pittsfield, Mass. to discuss whether its SUN program, having rescued 200 homeowners from eviction to date, can help Berkshire County residents preserve their foothold in the most coveted American dream. The nonprofit claims to have saved its participants more than 40 percent in principal payments, on average.
Sign up for our free newsletters
Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.
The well capitalized nonprofit has the interests of Massachusetts communities and citizens in mind. “Our goal, in addition to helping families, is to ensure the stability of neighborhoods,” said Boston Community Capital CEO Elyse Cherry. “When homes become vacant, they become targets for folks stealing piping or appliances or they become drug dens.”
Financial behemoth Bank of America was the first lender to take the leap with the nonprofit’s Boston pilot project, aiming to reduce its losses on non-performing loans. Boston Community Capital Corp. has $25 million in assets devoted to the SUN program and has established broad eligibility criteria, welcoming homeowners late on their mortgage payments, in foreclosure or facing foreclosure-based eviction, those who have filed for bankruptcy, have poor credit scores or who have been turned down for federal mortgage modification programs. Applicants must have stable income enabling them to sustain the refashioned mortgage payments.
The Massachusetts nonprofit earns a small profit with each sale due to slight markups on the purchase price for the homes, and it is not willing or able to forgive mortgage payments, having foreclosed on at least two homes due to delinquency. “We borrowed the money,” Cherry said. “We just can’t look the other way if nobody pays us.”
NPQ hopes Berkshire County officials may be able to incorporate Boston Community Capital’s SUN services, which appear to have the potential to save a number of local homeowners from the foreclosure nightmare. –Louis Altman