As regular readers know all too well, homeowners are struggling across Chicago to get loan modifications that could help them hang onto their homes. In highlighting an innovative program in Boston for homeowners, The New York Times raised the idea in March that relief could indeed come even after foreclosures are finalized.
Working with borrowed money, Boston Community Capital buys homes after foreclosure and sells or rents them to their previous owners, providing new mortgages and counseling to the owners, who typically have ruined credit. During the process the families remain in their homes. Since late fall it has completed or nearly completed deals on 50 homes, with an additional 20 in progress, ... [and] is now trying to raise $50 million to expand the program.
The nonprofit intervenes after foreclosure when banks don't know what to do with the foreclosed property and are more willing to sell. This timing, combined with organized demonstrations and legal pressure from students and professors at Harvard Law School, often results in a reasonable sale price, which in turn provides an affordable mortgage and neighborhood stability.
Would a similar organization help the Chicago foreclosure crisis? According to the article, Patricia Hanratty, Boston Community Capital board member, thinks so: "If what you've got is a real estate market that went nuts and a mortgage market that went nuts, what you've got is an opportunity."
Find out more about Boston Community Capital here.