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Elyse Cherry, Boston Community Capital, on how her program is helping homeowners start anew and keep their homes, despite foreclosure.
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Coverage and my next guest -- a program that's actually trying to make a dent in a number foreclosed homes in Massachusetts.
And it's actually looking to expanding the -- beyond that the least -- CEO Boston community capital.
At least.
Ed tell us a little bit about the program and exactly how works.
Well thanks very much Charles.
We do have a program here in Massachusetts that's part of -- community capital.
We are community finance intermediary -- their -- long time almost three decades now and our program which we -- -- some initiative for stabilizing urban neighborhoods.
Is intended to keep people in their homes not withstanding the fact that they may be -- in their mortgage or in foreclosure.
So what happens and right now we're only in Massachusetts although as you say we are trying to move outside of Massachusetts.
What happens is -- is coming in we put them through a full underwriting process just like we all -- to go through before the bubble.
And if we decide that in fact the borrower is likely to be able to pay a mortgage of the current market price.
Maybe not the bubble price that their original mortgage -- -- -- for the current market price.
We then go out to the lender or perhaps now it's the real estate inventory owner an attempt to buy back that property at current market so.
So let me stop there once secondly -- takes the loss then on the difference the bank will do is okay -- facility -- these that these low rates.
And they'll take a loss.
Well basically what we're saying to a lender is we're perfectly prepared to buy it for me what exactly the price that you could get from anybody else.
So the lenders.
Choice really -- to hang onto a property.
I don't know -- -- watch the market continue to go down or to sell that property and whether they sell to -- or whether they sell to somebody else it's really the same price.
You know what -- -- wondered dirty little secrets about the housing implosion.
And always adjustable rate mortgages is that a whole lot of people.
Stopped paying their mortgages before they even adjusted they could even make the lower payments.
How confident are you that the people that -- helping stay in these homes.
Are going to be able to still paid you know be big be able to meet their commitments.
And pay these them mortgages off.
We -- back in the days when everybody underwrote mortgages we had a loan default rate of somewhere around one -- 2%.
What really sent that to -- -- roof was the fact that lots of lenders were providing loans without bothering to figure out whether a bar had enough funds to pay and as you point out.
The -- often had didn't have funds even from the very beginning of the loan.
There were simply loans that should never have been made -- anything.
Approaching right right now that's -- we're running out of time I wanna help to promote your program but I also want people understand the you know like it is a lot of good harder programs out there like this one.
But what's what what are you what criteria are you taking.
To make sure that the people are still gonna meet the new commitments at they're getting this blessing of having a cheaper home.
Sure what we do is to assure that they that they mortgages at a level that people can afford that it does not so great that they can't afford their current income.
I have to tell you all of the folks we -- we only have a couple who've been unable to pay so almost everybody has actually been able to pay their mortgage.
And -- current market price just like they used to before the bubble.
All right leased area Boston community capital thank you very much -- really appreciated and good luck with the program.
Thank you journals OK well coming up don't call -- a -- record sells on horizon at least they -- big time it's 111.
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We're gonna talk about that but by the way this morning on morning company have to look at seven stocks that won them all to go -- -- -- we have to break we'll see how well I did.
