| House Refinance Center |
| Boston Community Capital Saves Homeowners From Foreclosure |
Home Credit Foreclosure Refinance Hard money Interest only mortgage Loan modification Shortsale Reverse mortgage Strategic default
 | |  | |  | |  | |  | |  | |  | |  | |  | |  |
Boston Community Capital (BCC) is a nonprofit organization that buys houses from
banks. These are houses that the banks had foreclosed on, or were in the
foreclosure process. Some were already listed on the market or were simply sitting
in inventory. BCC will then resell the houses to the homeowners.
The objective of BCC is to build healthy communities where low-income people live
and work. It's housing program is aptly named SUN, Stabilizing Urban
Neighborhoods.
How does the program work.
To understand how the program works we will look at a real example, as reported in
The Chronicle of Philanthropy. Cesar Santana of Lynn, Massachusetts had his
house foreclosed in January. He had an adjustable rate mortgage, and the payments
had adjusted to as high as $1,610 a month.
BCC was able to buy the property from the bank at current market price, and then
resell the house to Mr. Santana. BCC made a small mark-up on the sale. As a result
of the new transaction Mr. Santana gets to keep his house, and his mortgage
payment is only $631.
BCC is able to obtain low-cost loans. For example, it borrows at 4.25% and will lend
at 6.25%. So there is a small spread to help pay the overhead and to cover any
mortgages that might default.
So far BCC has done about 125 mortgages and there have only been one default.
The question some people are asking is, "why isn't this program across the
nation?". The short answer is money. BCC has a variety of sources for funding.
Loans and investments.
Loans are made to Stabilizing Urban Neighborhoods from accredited investors.
Some investors are wealthy individuals, and some might be venture funds. Loans
are generally five year terms and a reasonable return is expected. Funds such as
Sustainability Group has supported the initiatives of Boston Community Capital.
Grants.
Grant money is an important component of BCC's budget. It received a grant from
Open Society Foundation for $300,000. In 2010 BCC was one of the winners of the
Wachovia Wells Fargo NEXT Awards for Opportunity Finance. As a winner BCC
received a total of $5.5 million. Of this amount there was an unrestricted grant for
$500,000, while the remaining $5 million was a low-cost loan.
Subsidiary, Boston Community Venture Fund.
Boston Community Venture Fund (BCVF) is a subsidiary of Boston Community
Capital and also its investment arm. It specializes in community venture capital
projects. Some of these projects provide goods and services to low-income
communities.
Subsidiary, Aura Mortgage Advisors.
Aura Mortgage Advisors was founded in 2007 and provide a wide spectrum of
mortgage services. It makes mortgage loans on behalf of BCC, and conducts
mortgage finance workshops in the community.
While I applaud the work that BCC is doing in low-income communities, I still have a
very simple question. "Why can't the bank and the homeowner work out a deal?".
Any way you slice it, BCC is still a middle-man. And my experience with middle-men
is that they always get a cut of the action. When you cut out the middle-man you
should save money. Maybe there's more to this than meets the eye.
banks. These are houses that the banks had foreclosed on, or were in the
foreclosure process. Some were already listed on the market or were simply sitting
in inventory. BCC will then resell the houses to the homeowners.
The objective of BCC is to build healthy communities where low-income people live
and work. It's housing program is aptly named SUN, Stabilizing Urban
Neighborhoods.
How does the program work.
To understand how the program works we will look at a real example, as reported in
The Chronicle of Philanthropy. Cesar Santana of Lynn, Massachusetts had his
house foreclosed in January. He had an adjustable rate mortgage, and the payments
had adjusted to as high as $1,610 a month.
BCC was able to buy the property from the bank at current market price, and then
resell the house to Mr. Santana. BCC made a small mark-up on the sale. As a result
of the new transaction Mr. Santana gets to keep his house, and his mortgage
payment is only $631.
BCC is able to obtain low-cost loans. For example, it borrows at 4.25% and will lend
at 6.25%. So there is a small spread to help pay the overhead and to cover any
mortgages that might default.
So far BCC has done about 125 mortgages and there have only been one default.
The question some people are asking is, "why isn't this program across the
nation?". The short answer is money. BCC has a variety of sources for funding.
Loans and investments.
Loans are made to Stabilizing Urban Neighborhoods from accredited investors.
Some investors are wealthy individuals, and some might be venture funds. Loans
are generally five year terms and a reasonable return is expected. Funds such as
Sustainability Group has supported the initiatives of Boston Community Capital.
Grants.
Grant money is an important component of BCC's budget. It received a grant from
Open Society Foundation for $300,000. In 2010 BCC was one of the winners of the
Wachovia Wells Fargo NEXT Awards for Opportunity Finance. As a winner BCC
received a total of $5.5 million. Of this amount there was an unrestricted grant for
$500,000, while the remaining $5 million was a low-cost loan.
Subsidiary, Boston Community Venture Fund.
Boston Community Venture Fund (BCVF) is a subsidiary of Boston Community
Capital and also its investment arm. It specializes in community venture capital
projects. Some of these projects provide goods and services to low-income
communities.
Subsidiary, Aura Mortgage Advisors.
Aura Mortgage Advisors was founded in 2007 and provide a wide spectrum of
mortgage services. It makes mortgage loans on behalf of BCC, and conducts
mortgage finance workshops in the community.
While I applaud the work that BCC is doing in low-income communities, I still have a
very simple question. "Why can't the bank and the homeowner work out a deal?".
Any way you slice it, BCC is still a middle-man. And my experience with middle-men
is that they always get a cut of the action. When you cut out the middle-man you
should save money. Maybe there's more to this than meets the eye.
Boston Community Capital To The
Rescue: Homeowners Get A
Second Chance To Keep Their
Foreclosure Homes
Rescue: Homeowners Get A
Second Chance To Keep Their
Foreclosure Homes
title insurance buying a home refinance with ARM appraisal inspection community banks good faith estimate FHA streamline 203k breaking news
FHA mortgage approval nonprofit brokers servicemembers stated income refinance calculator downpayment closing fees bank owned (REO)
calculators zero down mortgage second mortgage mortgage interest deduction mortgage servicing first time buyer financial reform fannie and freddie
