City of Boston, Bank of America Announce Pilot to Preserve Tenancies in Foreclosed Properties
Initiative is Part of City’s Continued Efforts to Acquire Foreclosed Homes,
Stabilize Hardest Hit Neighborhoods
October 29, 2009 – (RealEstateRama) — Mayor Thomas M. Menino and Bank of America Corporation today announced a first-of-its-kind in the nation initiative to prevent tenants from being displaced out of foreclosed homes. The initiative marks the latest expansion in the City’s on-going efforts to meet all of the challenges presented by the foreclosure crisis.
Under this REO Tenancy Preservation Pilot initiative, the City of Boston, through the Boston Redevelopment Authority (BRA), will purchase foreclosed homes from the Bank of America with the existing tenants in place. The City will then sell these properties to homebuyers, non-profits, and private developers without displacing the tenants. Eligible buyers could benefit from the City’s federal Neighborhood Stabilization Program (NSP) funds, which are targeted funds for purchase and rehab of foreclosed homes.
“Earlier this year, President Obama signed into law the Protecting Tenants at Foreclosure Act of 2009 that guaranteed tenants the right not to be evicted without cause for at least 90 days after the foreclosure. Today we are taking this to the next level – protecting tenants all the way through the process until a new owner takes possession of the property,” said Mayor Menino. “Not only is this good for the tenants, it is also good for our neighborhoods – we want to prevent buildings from remaining vacant for long periods and attracting crime and vandalism.”
Presently, there are approximately 1,550 units of housing in 875 Real Estate Owned (REO) homes in Boston, concentrated primarily in East Boston, Dorchester, Hyde Park, Mattapan, and Roxbury. The City estimates that about 1,340 of these units were renter-occupied at the time of foreclosure. Research by the City of Boston has indicated that of those households that have been displaced by foreclosure, over 75% are renters that had no direct involvement in the actions that led to the foreclosure.
Mayor Menino also praised Bank of America for taking early action on the issue of tenants in foreclosed homes, and indicated that the City would be approaching other major lenders to expand this effort.
“Bank of America’s top priority is to help borrowers avoid foreclosure by finding affordable payment solutions for them. However, with the economic downturn, this isn’t always possible, and unfortunately, non-owner tenants may be subject to relocation through no fault of their own,” said Tom Lin, senior vice president of REO sales, Bank of America. “By working with the city and leading community partners to keep tenants in these homes, Bank of America strives to maintain a dignified quality of life for these families and help stabilize communities.”
Mayor Menino said the City and the Bank of America are proceeding immediately to implement this pilot initiative; currently four possible properties are being evaluated and tenants are being contacted to determine if they would like to participate.
For more information about the City of Boston’s foreclosure prevention efforts, visit www.cityofboston.gov/dnd/bhc
Contact:
Lucy Warsh
lwarsh.dnd (at) cityofboston (dot) gov
