Tenants, and not homeowners, in East Boston are some of the biggest victims of the recent mortgage and foreclosure crisis that began last year. With a large percentage of local foreclosed homes being the traditional triple-deckers that make up the neighborhood, many tenants are forced to vacate the property once the landlord has allowed the home to be foreclosed.
Mayor Thomas M. Menino announced that the City’s Department of Neighborhood Development (DND) has been awarded $13.6 million in the second round of Neighborhood Stabilization Program (NSP) funding to assist the City’s ongoing foreclosure prevention and reclamation efforts. Specifically, the competitively awarded funding will allow the City to support responsible redevelopment of up to 275 foreclosed homes in neighborhoods most burdened by Boston’s bank-owned properties, namely East Boston, Dorchester Roxbury, Hyde Park, and Mattapan.
“This award accelerates our ability to impact the foreclosure challenges that we’re facing. We’re making important progress, but our neighborhoods are still in danger,” said Menino. “I want to thank Senators Kerry and Kirk, as well as Congressmen Capuano and Lynch for their continued support of Boston’s neighborhoods. And, in particular, I want acknowledge Congressman Frank for his tireless advocacy on the issue of foreclosure.”
Boston was one of 482 total applicants requesting over $15 billion from the U.S. Department of Housing and Urban Development (HUD) in foreclosure funding. Since passage of the American Recovery and Reinvestment Act (ARRA) nearly one year ago, of which this foreclosure funding is part, the City has received close to $280 million in formula and competitive grants as well as bond allocations.
The NSP initiative was created as part of the “Housing and Economic Recovery Act of 2008,” designed to boost local economies through the provision of resources to purchase and rehab foreclosed homes. The City of Boston was allocated $4.23 million last winter in this first funding round, and subsequently received a matching grant from state of Massachusetts’ share of NSP funding. The latest award brings Boston’s total federal foreclosure funding to more than $21 million.
With these new NSP funds, the City believes it can greatly expand its efforts to acquire, renovate and return many of the 860 derelict foreclosed homes in East Boston and other parts of the city back to productive use and get them into the hands of responsible owners. These new resources will also enable the City to significantly expand its first-in-the-nation initiative to buy foreclosed homes before the tenants are evicted. Originally launched with Bank of America, the initiative now also includes Fannie Mae and Wells Fargo Bank with the National Community Stabilization Trust.
“The City of Boston has been in the forefront of efforts to reclaim foreclosed properties and put them back to productive use,” remarked Aaron Gorstein, Executive Director of Citizens Housing and Planning Association (CHAPA). “We look forward to continuing our work in partnership with the Mayor to provide desperately needed affordable housing for Boston residents.”
Back in November, local residents joined together to fight foreclosures in the neighborhood.
“The event went very well,” said organizer Dominic Desiata. “Tenants, homeowners and allies joined to call attention to the toll the foreclosure crisis is taking on the neighborhood, as well as sharing stories of how locals have fought and won to stay in their homes.”
The rally and subsequent press conference highlighted the need for neighbors to come together, and for banks to take meaningful action in negotiating with residents living in foreclosed properties instead of evicting them.
According to Desiata and his group, foreclosing banks are not willing to do meaningful loan modifications to avoid foreclosure.
Also, local organizations like the Neighborhood of Affordable Housing (NOAH) are offering free clinics for residents fearing the worst and hoping to hold on to their dreams of homeownership.
“We have foreclosure clinics every Monday at 6:00 p.m.,” said NOAH’s Carolina Trujillo. “Our program is very complete we can help people with options like refinance, loan restructure/modification, forbearance, repayment plans, short sales and deed in lieu.”
NOAH also organized with the state and City of Boston and brought a larger event to Revere High School where major lenders met face to face with borrowers.