Organizations help families avoid foreclosure

November 29, 2012 at 11:09 am

Today we share some of the good work that organizations across the country are doing to keep families in their homes. Marketplace reports on the efforts of the Resurrection Project, Self Help Federal Credit Union, and Boston Community Capital to buy underwater mortgages in order to help families avoid foreclosure.

The Resurrection Project teamed up with Self Help to purchase $60 million of troubled mortgages in Chicago, after a community bank had failed. The plan is to modify these 1,100 mortgages and help borrowers keep their homes. Boston Community Capital had started doing this kind of work back in 2009, and has helped over 300 families in Massachusetts with great success.

In North Carolina, the Federal Reserve Bank of Richmond reports that the foreclosure rate increased between June 2011 and June 2012, from 2.5 percent to 2.8 percent. Housing prices declined 1.5 percent in the second quarter of 2012, and since 2009 have depreciated by 12 percent. The map below, which is as of June 2012, shows that many counties in the state have foreclosure rates that are much higher than the average.

Clearly there are still many homeowners who are struggling with maintaining their mortgages. As Raul Raymundo of The Resurrection Project told Marketplace, keeping families in their homes is not only good for those individuals, but good for communities as a whole:

There’s a direct correlation between a foreclosed home and violence increasing. And there’s also a direct correlation between a foreclosed home and property tax levies being lost.

NeighborWorks has published a report called “Seven Ways Foreclosures Impact Communities,” which include increased crime, reduced municipal revenue, neighborhood blight,  and displacement of families. As the report says, “Not only are people losing homes, but also communities are suffering economically, physically and socially.”

Purchasing mortgages to help families stay afloat and keep their homes is one way to make sure that communities already hard hit by the financial crisis do not continue to lag  behind as the nation’s economy recovers. These households are the building blocks of our communities. The destabilization caused by massive foreclosures will continue to be a challenge for years to come. The work being done now by groups like the Resurrection Project, Self Help, and Boston Community Capital is an important part of the solution.

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Entry filed under: Banks, Economic Development, Economy, Housing. Tags: , , , , .

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