The strategy devised for tackling Boston Foreclosures

In 2008, there were 1215 foreclosed properties in the city of Boston.  However compared to other cities nation wide, Boston has remained above the Foreclosure crisis sweeping the nation. Boston Foreclosures are well below the national figures. The reason is that economy has not declined as fast as in other cities in America. Also Boston’s Mayor foresaw the crisis. The mayor of Boston must be credited with charting out a highly efficient program for dealing with the Boston foreclosures crisis as it loomed ahead.

•     1996-Mayor Mennino set up the Boston Home centre, a one stop shop for educational and financial services for Bostonians wanting to buy their first homes
•    1999- Mayor creates the Don’t Borrow Trouble campaign warning consumers about the dangers of several new loan products.
•    2004-Mayor collaborates with Freddie Mac and launches Boston Home center’s Credit Smart Program for extended financial educational services.
•    2006- Facing the foreclosure boom, the Mayor gets together Boston banks and creates First Choice Lender’s program. The Banks agree to Prevention of foreclosure lending practices, to help people with bad loans and to contribute to the Foreclosure prevention Fund
•    2007- The city expanded its Foreclosure prevention Network to include a number of agencies. State legislation was passed to enable truthful labeling in all mortgage offers and advertising, require licensing of originators of mortgage and to set up a state wide foreclosure prevention counseling network etc. By the end of 2007, the city avoided 30 % fewer foreclosures because of the Boston Home centre.
•    2008- The Foreclosure prevention Counseling Network expands. Boston’s Rental Housing Resource centre starts outreach program to help tenants in foreclosed homes. Despite all efforts, foreclosures in Boston show a rising tendency, touching almost 1500 housing units. Mayor Mennino starts his Foreclosure Intervention Team. The team identifies sensitive areas in Dorchester and Roxbury where they concentrate efforts. The federal, ‘Neighborhood Stabilization Program (NSP) arrives to assist in foreclosure crisis efforts to allocate funds to be used be the Department of Neighborhood Development (DND).
•    2009-the first of NSP funded programs is launched at the Homebuyer fair at the Boston Home Centre. Financial assistance up to $25,000 is announced to help purchase foreclosed property in deemed areas. Mayor announces $4 million allotted by DND to develop foreclosed properties.
 
In 2009, a team of students from the Harvard Law School also started a project to help tenants struggling in foreclosed properties in Boston. David Hallar and Nick Hartigan started the Foreclosure Task force, which provided legal advice to tenants facing eviction from foreclosed properties. They started a ‘No One Leaves Program’. The crux of the program is to make it financially untenable for banks to evict tenants from foreclosed homes.

 From the investor’s point of view, Boston Foreclosures are an extremely valuable investment as they are available well below market prices. They go from around 10-35% below their actual value.