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The Boston Community Capital, a nonprofit agency targeting to build stronger neighborhoods and communities in Massachusetts, is seeking stimulus funds to help expand its assistance program for residents facing REO property listings.

The Boston Community Capital hopes to receive $50 million under the Neighborhood Stabilization Program which is a part of the Obama Administration’s American Recovery and Reinvestment Act.

Since November 2008, the 25-year-old nonprofit has already committed about $4 million to purchase vacant and repo homes on REO property listings, help distressed homeowners remain or buy back their properties and lend money to developers tasked to rehabilitate empty distressed foreclosure properties.

Boston Community Capital Chief Executive Officer Elyse Cherry said that the nonprofit agency is now ready to intensify its efforts to help more distressed homeowners to avoid REO property listings and remain in their homes.

The stimulus funds will be used to help residents who have low and moderate income and lived in Massachusetts cities hardest hit by the foreclosure crisis. These cities include Chelsea, Boston, Everett, Revere, Lawrence, Lynn, New Bedford, Fall River and Worcester.

According to industry experts, many homeowners who have lost their source of income, jobs or their wages were pared down find themselves struggling to pay their monthly mortgages. Additionally, the drastic decline in home values has made refinancing very difficult because many homeowners find their properties are worth less than their total mortgage.

In 2008, Massachusetts posted 12,430 foreclosure properties, representing a 62 percent rise from 2007. In the first quarter of this year, 2,755 homeowners have already lost their houses to foreclosure.

Cherry said that the goal of Boston Community Capital is to help distressed homeowners before they go into any kind of foreclosure process. She added that it would to the advantage of everyone if more properties will be saved from foreclosures.

Meanwhile, staff members of Boston Community Capital are working on grant applications even during holidays to meet the deadline set on July 17. It is expected that the U.S. Department of Housing and Urban Development (HUD) will award the funds in the fall.

The money is part of the federal funds totaling $1.93 billion allotted to fight the effects of the increasing number of homes on REO property listings. The nonprofit agency is also planning to apply for a private funding of $100 million.

The Economic Recovery Act of 2008 consists of the Hope for Homeowners Act which will take effect on the 1st of October this year. The bill will let home owners who qualify avoid foreclosures by refinancing their existing mortgages into the ones insured by the Federal Housing Authority.

Barney Frank, the chairman of the House Financial Services Committee along with Maxine Waters, the chairwoman for the Community Opportunity Sub-committee asked lenders and servicers to wait until the Hope for Homeowners Act comes into play, before they decide to continue with their foreclosure proceedings.

Barney Frank said that if a little patience could be shown further worsening of the Massachusetts foreclosure listings could be avoided. He also said that he was hopeful that among all the people who would qualify for the program no one would have to face foreclosure proceedings before the 1st of October. Saying that the lending industry had the power to do so, he asked them to show restraint until then.

Waters spoke on similar lines saying that since she’d emphasized on the servicing of mortgages since the onset of the mortgage crisis, she too supported Barney Frank?s appeal to display patience. She said she would hate to see home owners anywhere in the country losing their homes only because of the October 1st deadline.

For home owners to qualify for the FHA refinancing program, over 31% of the home owners monthly earnings would need to go towards making payments on their mortgage as of the 1st of March, 2008. Besides this, other qualifications that the FHA program has outlined would also need to be met. Borrowers would also have to agree to the condition that, if the distressed property was to increase in value in the future, then the government would receive part of the appreciated value. Around 400,000 people are expected to avoid their homes being foreclosed due to the bill.

Barney Frank also spoke of advocating for the servicing and mortgage industry being restructured if at this point of time they did not forbear and prevent foreclosures aggressively.

Massachusetts has been taking the problem of foreclosures very seriously. Some months back, if one looked at the Massachusetts foreclosure listings, it was easy to know that there were an increasing number of people succumbing to this crisis, and some even without so much as a fight!

Attorney general of Massachusetts, Martha Coakley, has every reason to be proud. There have been only 351 foreclosure filings by the lenders in the state for June this year. The reason for this is the statewide law that allows an extra 60 days to the existing default timelines. This 90 day default timeline is also known as the “right to cure” and is applicable for borrowers who are either in a single-family or have owner-occupied homes. This right to cure law took effect in April this year and has been so effective that it has lowered the numbers of homes being listed in Massachusetts foreclosure listings in only two months!

While many experts believe that this lull is only temporary and very soon the Massachusetts borrowers will give in to the financial pressures and number of foreclosures will increase not just the foreclosure listings in Massachusetts, but also nationwide foreclosure listings. Very clearly, it?s not just the Massachusetts real estate market that is in a state of turmoil, but also the national market is reeling under increasing economic slowdown and subprime after effects. It is highly unlikely that the market will be able to recover any time soon, but first time homebuyers and investors sitting on surplus cash can make the best of this opportunity. After all, Massachusetts foreclosure listings are a direct outcome of the foreclosures in the state and allow interested people to browse the Internet and seek assistance of online foreclosure brokers to find their perfect home and fulfill their American Dream!