Housing News

Philadelphia Fighting the Foreclosure Crisis

More and more homeowners receive support.

I just found two amazing homeowner programs in Philadelphia that should be working out well for a long time. The first, Boston Community Capital’s program of buying homes after foreclosure and sells or rents them to their previous owners may be a micro project if one looks at it but it’s fair enough to say that such idea needs to be adopted. Working with BCC is City/Life Vida Urbana, a community organization that promotes empowerment and justice, promotes BCC’s business. The New York Times states, “When families receive eviction notices, his group holds demonstrations or blockades outside the properties, calling on lenders to sell at market value. It also connects the residents with the Harvard Legal Aid Bureau, whose students work to pressure lenders to sell rather than evict by prolonging eviction and ‘driving up litigation costs,’ said Dave Grossman, the clinic’s director.”

The number of homeowners who benefitted from the project is adding up. So far, 50 homes have become successful deals and 20 are in the process of completion. But no matter how good it is, it has its flaws too. The New York Times explains, “The program is not a solution for all lenders or distressed homeowners… Many commercial lenders, similarly, would shy away from such a program because it involves writing mortgages for borrowers who have already defaulted once — a high risk for a small reward. ”

On the other hand, the state is also benefitting from the Pennsylvania Housing Finance Agency’s (PHFA) emergency mortgage assistance program which is funded by state and borrowers’ repayments. The agency offers hardship loans of up to $60,000 up to three years to the unemployed and those having financial hardship. CNNMoney.com explains, “Loan payments are made directly to the servicers and a lien is placed on the property. The aid is repaid at a 5.25% interest rate over 10 years on average, though the borrower’s financial circumstances are taken into account.”

And this program has been around since 1983. Recently, the Obama has come under pressure after disappointing mortgage modifications rate were reported by watchdog agencies. Now, they’re launching the same type of program from PHFA.

Let’s keep those foreclosure programs coming. The last thing we need is to hear about another government mortgage program failure.

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