Through its Stabilizing Urban Neighborhoods initiative, Boston Community Capital buys homes in some stage of foreclosure. It then resells them to the occupants with new 30-year, fixed-rate mortgages. On average, homeowners see their monthly mortgage payment and loan balance reduced by 40 percent, according to the nonprofit organization.
Boston Community Capital plans to buy an additional 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 looking for local partners in Maryland to expand the program into the region, said Elyse Cherry, chief executive of the 28-year-old community development financial institution.
“Nobody has benefited from evicting people,” Cherry said. “It’s better to keep people in their home, keep a floor under housing prices and keep the community stable.”
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, saw a 131 percent jump in foreclosure activity in the first six months of the year. One in every 76 homes is in foreclosure in Baltimore, the epicenter of the state’s housing troubles, according to RealtyTrac.
Another hard-hit area, Prince George’s, had 2,802 homes in the early stages of the foreclosure process as of last month, the second highest number of filings in Maryland.
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, its 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.
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.
The nonprofit organization negotiated a new mortgage of $1,141 a month, a 31 percent reduction from the previous price. The nonprofit’s program may not work for every struggling homeowner, and the group isn’t offering the cheapest mortgages. Its mortgages come with a 6.38 percent interest rate, which is at least two percentage points higher than average market rates. But Cherry said the rate is far lower than what the high-risk borrowers the nonprofit group works with could likely get elsewhere.