Sun Rising – Program Povides Dynamic Assistance to Homeowners in Crisis

March 30, 2011
By

-By Seth Daniel

seth@reverejournal.com

Badrul Khan of Vane Street was able to ward off a foreclosure auction at his home in 2009 with the assistance of Boston Community Capital’s innovative program, Saving Urban Neighborhoods (SUN). The program was recently launched on a wider scale and has targeted Revere as one of the areas needing the most help. Khan and his family have remained stable in their home ever since.

Badrul Khan woke up one cold Tuesday morning in January 2009 with a lump in his stomach.

He pulled back the curtains to see if the auctioneers were outside yet.

They weren’t, and it kind of surprised him.

His kids were off to school and his wife had left early for work, unhappy about the fact that the couple’s home was about to be sold to the highest bidder.

He pondered what it would be like to walk down his sidewalk – or what used to be his sidewalk – and hand over his house key to the auctioneer, a formality that takes place at every foreclosure sale.

Everything they had worked for and the stability of their family was about to be lost in a swarm of fast-talking and cash deposits.

He made a quick call to the auctioneer to ask if he might be able to get his things out of the house after the auction – perhaps within the day.

Then he called his representative from Boston Community Capital (BCC) – a Boston-based housing help group now operating in Revere. He wanted to go over all of the intricacies one more time, as they had been helping him try to salvage his home.

However, the representative wasn’t as downtrodden as he was and she told him to check his e-mail.

Waiting in the inbox of his e-mail was a message that indicated the auction had been called off, and that Khan and his family were going to be able to stay in their home as part of BCC’s innovative Saving Urban Neighborhoods (SUN) Program. They were one of the first families to be included in what is a totally new effort just recently launched on a wider scale.

“The eviction was actually called off on Monday at 5 p.m. and they accepted our offer at the last minute and took our down payment on Tuesday,” said Khan. “You see these suspense movies and this is so much worse than any of those. It’s so much more trying. The whole situation was the thrill of a lifetime, but not the kind of thrill you go looking for.”

The SUN program started in Boston nine months ago and has premiered in Revere over the last few months, being championed by Revere native and BCC Executive Director Elise Cherry.

The SUN program is a new division of BCC – which has existed for many years as an affordable housing investor and builder.

So far, more than $51 million has been dedicated to the SUN program. The funds come entirely from private investors who want to see local neighborhoods stabilized for people like Khan, who are responsible, but have ended up in precarious situations.

Spokesperson Laurie Holmes emphasized that not a drop of government money is involved – only the dollars of conscientious investors.

“These investors know the BCC brand and are really interested in stabilizing neighborhoods through home ownership,” said Holmes – who formerly headed up Chelsea’s HarborCOV. “For individual investors, it’s about social conscious investing. They’re getting a return on their money, but they’re doing something they believe in that helps people at the same time. It may not be like a stock market fund, but these are investors who seek morality-based opportunities.”

And quite an opportunity it is.

Holmes has been pitching the program and drumming up interest all over Boston and Revere for the past several months. Her excitement lies in the fact that there really isn’t any program out there to help homeowners in the way the SUN program does. The uniqueness is that they strive to keep homeowners in their homes and to stabilize the situation with an affordable mortgage.

“This is where nobody has come up with a solution that works,” said Holmes. “I think the SUN program is successful. If you look at a map, these areas are where the highest concentration of these predatory loans are focused. We’re in the process of raising more money and we want to expand and it’s my belief this will scale to a national model. They want us in Los Angeles and in Nevada. No one else is doing this.”

What the SUN program is specifically doing is helping people who are facing foreclosure or a short sale to stay in their homes. By using its experience, SUN is able to negotiate with banks or attorneys to stop the process and potentially buy the home for a reasonable price. Because they have a good amount of capital on hand, they can make quick buys for decent prices.

Once they own the home, the SUN program partners with the homeowner to offer them an affordable mortgage, and they must pay that “rent” every month. In exchange, they get to stay in the home and maintain ownership.

If a homeowner in the program ends up selling the home, they have to split the profits with BCC. Likewise, there are a number of other safeguards to prevent property flipping and to promote stable owner-occupied neighborhoods.

Before SUN even gets involved in a situation, Holmes said that they do a thorough evaluation of each client’s situation – including how they ended up in the crisis situation.

A client must have a stable and predictable income, even if it is just Social Security payments. They must also be in a state of crisis, such as a medical condition or an unexpected job loss. Finally, they must also have received a bad loan – such as a balloon mortgage.

“We qualify everyone and make sure beforehand that they can afford a reasonable mortgage,” said Holmes. “If this is not a good solution for them, we’re going to be honest with them and send them to the proper services.”

So far, the program has made more than 100 loans at a total of $13 million, and they report 100 percent of those loans have a consistent repayment record.

“We have a lot more in the pipeline, but we’ve only done a handful in Revere so far,” Holmes said. “We want to work with more people here.”

In Khan’s case, he and his wife moved to Vane Street from Stoughton. His wife had a very lucrative home day care center there, and it didn’t work out once in Revere – leaving the family unexpectedly with one income.

“As soon as we moved into our home here we realized this neighborhood wasn’t conducive to operating a day care center, so her business went from successful to zero,” he said. “It was like that for a long time and that really effected our income. I still had my job, but my wife didn’t have an income. At the same time, we were both experiencing some health issues that also figured into this.”

Soon, the foreclosure notices began and they did everything they could to find help.

Some places were unfriendly.

Others were inexperienced.

They even tried going to a sit-in at Gov. Deval Patrick’s office, which did work temporarily, but didn’t offer the Khans a long-term solution.

“There were so many times I didn’t see any way that we could stay in our home any longer, but my wife didn’t want to let go, so I found a way,” said Khan. “BCC was just a supporting hand. People listened to you. It’s not condescending or judgmental because you need help. They come and explain everything and give consolation and solitude in a crazy situation.”

For Khan, it was a stabilizing force in a time of instability.

Holmes said that is exactly what her organization wants to do on a larger scale. She said they believe in home ownership, that the dream can be resurrected and that it can make Revere stronger.

“This is about homeownership being the pillar of every neighborhood,” she said. “We want strong homeowners. What every neighborhood in Revere needs and what has made Revere strong is having owner-occupied homes. We want owner-occupants on every street and we want them to get support. They are the glue to the city.”

For more information on the SUN program of Boston Community Capital, contact their office at (617) 933-5880.

 

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