New program helps people avoid foreclosure

There were a million foreclosures of American homes last year. And there are expected to be nearly another million this year. A lot of folks are desperate, so we asked CBS News chief business correspondent Anthony Mason to look for an innovative program somewhere - that's keeping people in their homes.

He found it in Boston, where a new kind of financial institution is buying foreclosed homes and selling them back to the original owners.

RANDOLPH, Mass. - Monica and Mike Bassila's housing nightmare started like so many others, with foreclosure and the threat of eviction.

Monica teared up when she said there were 80 people standing outside her house, wanting to buy it.

But their story has a different ending. The Bassila's house was sold to a nonprofit financial group called Boston Community Capital, which, this week, agreed to sell it back to them.

"We're prepared to schedule your closing," said Elyse Cherry. "So you can have your home back."

"I know I'm gonna cry," Monica said. "I'm sorry." (9:03:56)

Cherry, CEO of Boston Community Capital said, "The goal really, is to keep as many people who are going through this foreclosure process in their homes as possible."

"Has it been difficult to persuade the banks to do this?" Mason asked.

"Well, it has been difficult," Cherry said. "And it continues to be difficult."

But here's how BCC is doing it: the Bassilas had a $330,000 mortgage, but the value of their house plunged to 180,000. BCC bought the foreclosed property from their bank at that lower price, and is selling it back it Bassilas for $233,000. That lowers their monthly payment by 25 percent.

But this is not a charity. Bcc is financed, in part, by big investment funds that expect a return.

Harvard Legal Aid

Amy Domini manages the Sustainability Group - a billion dollar fund for wealthy investors. "My investors want to be part of the solution. That's what I attempt to give them. When they call and ask what their portfolio is doing, this is what they're talking about."

BCC makes sure clients like the Bassilas can afford even the lower mortgage and have steady paychecks. Monica works at the state Department of Health. Mike is on disability.

In a little over a year BCC has helped 125 Boston area families. Only one has defaulted.

"There will be people who are paying their mortgages who see this and say, 'why should those people be helped,'" Mason said.

"I'm hard pressed to see how we're helped as a country by making more people homeless and putting more people out of their homes," Cherry replied.

BCC hopes to roll this program out nationally. In Boston alone, 1,700 are in foreclosure.

But now, Monica and Mike Bassilla, who have two daughters and a son in the Marines, won't have to move.

"Today is a day I've waited for, for the past 3 years," Monica said. "I want to take that sign down."

After a three year fight to keep her house, Monica Bassila is finally home again.

[nick_sacco]

Glad to see that the SUN program is getting some attention. It has helped many Boston area families.

SUN came out of a movement of regular people (homeowners and tenants) who are fighting bank evictions in court and in the streets. It started in Boston, but has now grown to 8 different sites across New England!

For more info, check out City Life/Vida Urbana. Check their website and several videos of the Bank Tenants movement in action. The large meeting showed in the clip is at the City Life/Vida Urbana office.

[mf2344]

There are so many peoople who would repurchase their home at a little higher price if only the lenders would allow it. Sellers and Buyers in most short sale situations are required by most lenders (Bank of America and the other major banks for example)to sign an "Arm's Length Transaction" whereby they agree under future penalty to never sell nor rent to the current owners. I know of a specific example where the current owners/sellers owe much more than the current value of their home. They owe approx $400,000 on a beautifully-built home with a custom private pool, spa and outdoor kitchen. The home is worth far less today; anywhere from $150,000 to $300,000, depending upon who does the Broker Price Opinion for the bank. The bank had only one Broker Price Opinion (don't know what amount) and has accepted the short sale terms and an offer at $120,000. The current owners of course have to move and the new buyer will be able to realize very probably a $50,000 profit on the home almost immediately. Three questions....1. why is the bank accepting such a low offer from a stranger? 2. why not sell it back to the current owners for $120,000? 3. Who is really benefiting....the new buyer.

This is happening continually and the only people who are hurt are the original homeowners. Boston Community Capital is being praised and there is nothing wrong with that other than, why can this entity resell the home back to the owners while the big banks cannot or will not?

Another common situation is that the home is bought back at a foreclosure sale by the lender at a price lower than the owed amount. Then the lender resells the home through the mls at a price even lower than the auction amount. Why?

I am a Realtor in Arizona and know that this is happening all the time and no one seems to be incensed about it. I am not a current homeowner and thankfully not in a distressed ownership situation but I am so bothered by the fact that the lenders can legally do this and no one is screaming about it. This is my scream. Thank you.

[maria417]

I understand these banks have many underhanded ways. The bottom line is folks bought high and are stuck by unsavory lenders, I know 'am there. I have faced foreclosure and cashed in my pension. In any case some one who sees what you see, almost has a responsibility to report it. Here is a link that might help..

http://www.allgov.com/Agency/Financial_Crimes_Enforcement_Network