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City of Boston Thomas M. Menino, Mayor

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.

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City of Boston Thomas M. Menino, Mayor

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  1. BOSTON’S ANTI FORECLOSURE STRATEGY City of BostonThomas M. Menino, Mayor Department of Neighborhood DevelopmentEvelyn Friedman, Chief and Director

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

  3. BOSTON’S ANTI FORECLOSURE STRATEGY PREVENTION INTERVENTION RECLAMATION

  4. PREVENTION 1999: Don’t Borrow Trouble

  5. PREVENTION

  6. PREVENTION Residential Foreclosures in Boston 1990-2007

  7. BOSTON’S ANTI FORECLOSURE STRATEGY PREVENTION INTERVENTION RECLAMATION

  8. INTERVENTION Boston Home Center Foreclosure Prevention Transit Ads, 2006

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

  10. INTERVENTION Impact of Foreclosure Prevention on Overall Foreclosure Rate

  11. BOSTON’S ANTI FORECLOSURE STRATEGY PREVENTION INTERVENTION RECLAMATION

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

  13. 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% 3-Family % Stock 18% % Deeds 40% All Other Property Types % Stock 38% % Deeds 3%

  14. RECLAMATION Bank-Owned Homes in Boston September 2008: 982 0.8% of Boston’s 1-4 & Condo Housing Stock

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

  16. RECLAMATION • 3-Part Strategy • Targeted Action In Hot Spots • Distressed Property Redevelopment • Homebuyer Strategy

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

  18. RECLAMATION 1. Targeted Action in Hot Spots

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

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

  21. 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 pre-qualified developers Rapid one-stop gap funding investment by City (if needed) Developer completes renovation & markets at agreed-upon price to homebuyers Sale to homebuyer.

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

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

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

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

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

  27. 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

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

  29. 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 City-supported specialized bank loan product. RECLAMATION 3. Homebuyer Strategy: Acquisition/Rehab

  30. City connects homebuyer to ‘REO Specialist’ to track down property sellers and availability of properties. Negotiation, with help from REO Specialist. Offer accepted. Specialist helps buyer get to closing Purchase-Rehab using City-supported 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 provides rehab analysis before offer made.

  31. CHALLENGES AHEAD • Neighborhood Stabilization Investment not Eligible for Federal Funding • Availability of Credit • Engaging Good Developers & Contractors • Servicer Cooperation

  32. BOSTON’S ANTI FORECLOSURE STRATEGY City of BostonThomas M. Menino, Mayor Department of Neighborhood DevelopmentEvelyn Friedman, Chief and Director

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