Pilot program aimed at helping renters in foreclosed properties

November 5, 2009
By

Tenants in East Boston, not homeowners are some of the biggest victims of the recent mortgage and foreclosure crisis that began last year. With a good percentage of foreclosed homes being the traditional triple-deckers that make up the local neighborhoods, many tenants are forced to vacate the property once the landlord has allowed the home to be foreclosed.

Last week, Mayor Thomas Menino and Bank of America Corporation announced a first-of-its-kind in the nation initiative to prevent tenants from being displaced out of foreclosed homes.

Under the Real Estate Owned (REO) Tenancy Preservation Pilot initiative, the City of Boston, through the Boston Redevelopment Authority (BRA), will purchase foreclosed homes here and other Boston neighborhoods that have been hit hard by foreclosure. The City will then sell these properties to homebuyers, non-profits, and private developers without displacing the tenants. Eligible buyers could benefit from the City’s federal Neighborhood Stabilization Program (NSP) funds, which are targeted funds for purchase and rehab of foreclosed homes.

“Earlier this year, President Barack Obama signed into law the Protecting Tenants at Foreclosure Act of 2009 that guaranteed tenants the right not to be evicted without cause for at least 90 days after the foreclosure,” said Menino. “Today we are taking this to the next level – protecting tenants all the way through the process until a new owner takes possession of the property.”

Menino added that the program was not only good for the tenants but also good for the neighborhood.

“We want to prevent buildings from remaining vacant for long periods and attracting crime and vandalism,” he said.

Presently, there are approximately 1,550 units of housing in REO homes in Boston, concentrated primarily in East Boston, Dorchester, Hyde Park, Mattapan, and Roxbury. The City estimates that about 1,340 of these units were renter-occupied at the time of foreclosure. Research by the City of Boston has indicated that of those households that have been displaced by foreclosure, over 75 percent are renters that had no direct involvement in the actions that led to the foreclosure.

Menino praised Bank of America for taking early action on the issue of tenants in foreclosed homes, and indicated that the City would be approaching other major lenders to expand this effort.

“Bank of America’s top priority is to help borrowers avoid foreclosure by finding affordable payment solutions for them,” said Tom Lin, senior vice president of REO sales, Bank of America. “However, with the economic downturn, this isn’t always possible, and unfortunately, non-owner tenants may be subject to relocation through no fault of their own,”

Lin said by working with the city and leading community partners to keep tenants in these homes, Bank of America has strived to maintain a dignified quality of life for these families and help stabilize communities like East Boston.

Menino said the City and the Bank of America are proceeding immediately to implement this pilot initiative; currently four possible properties are being evaluated and tenants are being contacted to determine if they would like to participate.

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