Boston Community Capital thinks it has a solution to clear the backlog of troubled mortgages that continues to hang over parts of the country — buy them.
It has bought nearly 400 homes in the last four years, and now has an eye on Baltimore and Prince George’s County — where the impacts of the housing crash are still being felt.
Through its Stabilizing Urban Neighborhoods initiative, Boston Community Capital buys homes in some stage of foreclosure. It then resells the houses to the occupants with new 30-year, fixed rate mortgages. On average, homeowners have their monthly mortgage payment and loan balance reduced by 40 percent.“Nobody has benefited from evicting people,” said Elyse Cherry, chief executive of Boston Community Capital, a 28-year-old community development financial institution. “It’s better to keep people in their home, keep a floor under housing prices and keep the community stable.”
The nonprofit plans to buy another 75 homes in Massachusetts and other states with the help of a $25 million loan it received from East Boston Savings Bank this spring. It is currently looking for local partners in Maryland to expand the program, said Cherry.
Nationwide, the pace of foreclosures has slowed. The number of houses in some stage of foreclosure in the first half of this year fell 23 percent from the same time a year ago, according to RealtyTrac, a foreclosure-listing firm.
Not every area is seeing conditions improve, however. Maryland, with 18,861 foreclosure filings, witnessed a 131 percent jump in activity in the first six months of the year. One in every 76 homes is in foreclosure in Baltimore City, the epicenter of the state’s housing troubles, according to RealtyTrac.
Another hard hit area, Prince George’s County, had 2,802 homes in the early stages of the foreclosure process as of June.
Housing Options & Planning Enterprises, a foreclosure prevention organization in Oxon Hill, gets nearly as many visits from struggling families as it did during the worst of the recession, said Donna Hurley, the executive director. She said some of those homeowners are government workers who have been forced to take unpaid days off because of budget cuts.
“When you’re losing hours and income, and cost of living is steady rising, it has an impact on people being able to pay the mortgage,” Hurley said. “The banks are not really providing principal reductions.”
She met with staff from Boston Community Capital earlier this year to discuss replicating the foreclosure relief program in Prince George’s. Hurely said the county government has been working to address the lingering housing problems, but the real issue is with mortgage servicers that are unwilling to give borrowers a break.
Foreclosures have ravaged communities across the country. Massachusetts, where the SUN program is based, is experiencing a decline in new filings, but only after years of lenders repossessing tens of thousands of homes throughout the state.
Lynne and Nancy Andresse almost saw their home meet a similar fate.