Funding Sought to Help Residents Facing REO Property Listings

Posted on July 7th, 2009 in Massachusetts

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 foreclosed homes on REO property listings, help distressed homeowners remain or buy back their properties and lend money to developers tasked to rehabilitate empty 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.

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