BOSTONS ANTI FORECLOSURE STRATEGY City of Boston Thomas

BOSTON’S ANTI FORECLOSURE STRATEGY City of Boston Thomas M. Menino, Mayor Department of Neighborhood Development Evelyn Friedman, Chief and Director

BOSTON’S ANTI FORECLOSURE STRATEGY Strategy Components: PREVENTION INTERVENTION RECLAMATION

BOSTON’S ANTI FORECLOSURE STRATEGY PREVENTION INTERVENTION RECLAMATION

PREVENTION 1999: Don’t Borrow Trouble

PREVENTION

PREVENTION Residential Foreclosures in Boston 1990 -2007

BOSTON’S ANTI FORECLOSURE STRATEGY PREVENTION INTERVENTION RECLAMATION

INTERVENTION Boston Home Center Foreclosure Prevention Transit Ads, 2006

INTERVENTION Foreclosure Prevention Assistance Mayor Menino With Foreclosure Prevention Client At Servicers Workshop

INTERVENTION Impact of Foreclosure Prevention on Overall Foreclosure Rate

BOSTON’S ANTI FORECLOSURE STRATEGY PREVENTION INTERVENTION RECLAMATION

RECLAMATION Neighborhood Impacts of Foreclosures Percentage of Residential Stock Facing Foreclosure 2007 Includes Condos and 1 -4 Family Homes PROJECTED FORECLOSURE IMPACTS, 2008

RECLAMATION Foreclosures Deeds By Property Type 2008 through 9/15 Condominiums % Stock 18% % Deeds 25% 1 -Family % Stock 12% % Deeds 10% 2 -Family % Stock 14% % Deeds 22% All Other Property Types % Stock 38% % Deeds 3% 3 -Family % Stock 18% % Deeds 40%

RECLAMATION Bank-Owned Homes in Boston September 2008: 982 0. 8% of Boston’s 1 -4 & Condo Housing Stock

RECLAMATION PHYSICAL CONDITION OF BANK-HELD PROPERTIES IN BOSTON Abandoned: 84 Deteriorating: 179 Fair-Good: 594 As of July 2008, Includes 857 of 936 REO Properties

RECLAMATION 3 -Part Strategy 1. Targeted Action In Hot Spots 2. Distressed Property Redevelopment 3. Homebuyer Strategy

RECLAMATION 1. Targeted Action in Hot Spots Mayor Menino surveys foreclosed homes in Hendry Street neighborhood

RECLAMATION 1. Targeted Action in Hot Spots

RECLAMATION 2. Distressed Property Redevelopment Distressed REO Inventory September 2008 Distressed 31% Fair-Good 69% 21 Hendry Street

RECLAMATION 2. Distressed Property Redevelopment Homeownership Path: City Acquisition Model City Negotiates Single or Bulk purchases from lenders City transfers acquisition rights to prequalified developers Rapid onestop gap funding investment by City (if needed) Developer completes renovation & markets at agreed-upon price to homebuyers Sale to homebuyer

RECLAMATION 2. Distressed Property Redevelopment Federal Funding Role Homeownership Path: City Acquisition Model City Negotiates Single or Bulk purchases from lenders City transfers acquisition rights to prequalified developers Rapid onestop gap funding investment by City (if needed) Developer completes renovation & markets at agreed-upon price to homebuyers Sale to homebuyer

RECLAMATION 2. Distressed Property Redevelopment: City Acquisition 11 Coleman Street: City negotiated price of $30 K/unit, Rights now transferred to Contractor-Developer

RECLAMATION 2. Distressed Property Redevelopment Homeownership Path: Private Acquisition Model Developers and NPOs are prequalified for State acquisition loan fund Developers purchase properties using State loans, staying within HUD price limits Rapid onestop gap funding investment by City (if needed) Developer completes renovation & markets at agreed-upon price to homebuyers Sale to homebuyer.

RECLAMATION 2. Distressed Property Redevelopment Federal Funding Role Homeownership Path: Private Acquisition Model Developers and NPOs are prequalified for State acquisition loan fund Developers purchase properties using State loans, staying within HUD price limits Rapid onestop gap funding investment by City (if needed) Developer completes renovation & markets at agreed-upon price to homebuyers Sale to homebuyer.

RECLAMATION 2. Distressed Property Redevelopment Affordable Rental Path Prequalified developer gets property from City with approval for affordable rental housing Developer privately acquires REO property Request & approval for gap financing from City Rehab work completed Property sold with affordability covenants to qualified rental operator Property retained by developer with affordability covenants

RECLAMATION 2. Distressed Property Redevelopment Federal Funding Role Affordable Rental Path Prequalified developer gets property from City with approval for affordable rental housing Developer privately acquires REO property Request & approval for gap financing from City Rehab work completed Property sold with affordability covenants to qualified rental operator Property retained by developer with affordability covenants

RECLAMATION 3. Homebuyer Strategy Distressed REO Inventory September 2008 Distressed 31% Fair-Good 69% Mayor Menino welcomes would-be homebuyers to the REO Trolley Tour

RECLAMATION 3. Homebuyer Strategy Marketing Materials For Workshop On How To Buy a Foreclosed Property

RECLAMATION 3. Homebuyer Strategy: Acquisition/Rehab Homebuyer participates in REO tour and identifies properties of interest. Completes training workshop City connects homebuyer to ‘REO Specialist’ to track down property sellers and availability of properties. City provides rehab analysis before offer made. Negotiation, with help from REO Specialist. Offer accepted. Specialist helps buyer get to closing Purchase. Rehab using Citysupported specialized bank loan product.

RECLAMATION 3. Homebuyer Strategy: Acquisition/Rehab Use of Federal Funds Homebuyer participates in REO tour and identifies properties of interest. Completes training workshop City connects homebuyer to ‘REO Specialist’ to track down property sellers and availability of properties. City provides rehab analysis before offer made. Negotiation, with help from REO Specialist. Offer accepted. Specialist helps buyer get to closing Purchase. Rehab using Citysupported specialized bank loan product.

CHALLENGES AHEAD 1. Neighborhood Stabilization Investment not Eligible for Federal Funding 2. Availability of Credit 3. Engaging Good Developers & Contractors 4. Servicer Cooperation

BOSTON’S ANTI FORECLOSURE STRATEGY City of Boston Thomas M. Menino, Mayor Department of Neighborhood Development Evelyn Friedman, Chief and Director