Mayor and banks unite to help folks avoid foreclosure

Mayor Thomas M. Menino joined senior officials from several Boston banks to announce a major expansion of the city’s foreclosure prevention initiative. New measures intended to help prevent people from defaulting on debt and losing their homes include a refinancing consortium, the establishment of a Boston Homeownership Preservation Fund to increase counseling and outreach efforts to help keep residents from reaching foreclosure, and a nine-fold expansion of counseling services offered through the city’s Boston Home Center.

In addition, Menino recognized six Boston banks as “First Choice Lenders” for their assistance in the city’s foreclosure prevention efforts, support of outreach and counseling, and commitment to lending practices that minimize the risk of foreclosures.

“My message today to all Boston homeowners is this: If you are in trouble or you think you are headed for trouble paying your mortgage, there is help available. Call the Boston Home Center at 635-HOME,” Menino said. “Don’t wait until it’s too late.

“Thanks to these banks — these City of Boston First Choice Lenders — and our nonprofit partners, we have created a foreclosure prevention network aimed at helping Boston homeowners avoid foreclosure,” he added.

The Department of Neighborhood Development (DND) and its Boston Home Center have been meeting with officials from several leading Boston banks for the past several months to establish a collection of products and resources aimed at helping to refinance homeowners into more stable and secure mortgages. In addition, the banks will provide financial support for the city’s foreclosure prevention counseling program through a newly established Boston Homeownership Preservation Fund.

The banks named City of Boston First Choice Lenders are Bank of America, Boston Private Bank & Trust, Citizens Bank, Eastern Bank, Mt. Washington Bank and Sovereign Bank. These institutions have exemplary lending records that include a substantially lower share of foreclosures than lending market share, Menino said. They have also committed to adhere to a common set of lending practices seeking to place homeowners in the most sustainable mortgages.

“When it comes to foreclosures, we all know that these banks are not the problem — it’s some mortgage companies,” said Menino. “Even so, these banks have been willing to step up to the plate and be part of the solution. I challenge other lenders who operate in the City of Boston to make a similar pledge.”

As part of the prevention effort, the Boston Home Center is increasing its foreclosure counseling services by making available up to $350,000 to expand the capacity of its existing partner agencies, ESAC (Ensuring Stabilization through Action in our Community) and HOME (Homeowner Options For Massachusetts Elders), and establishing new counseling capacity at Nuestra Comunidad Development Corporation, Urban Edge and Mattapan Family Service Center.

In May, Menino announced his commitment to fight the rising tide of foreclosures in Boston. Statistics show Boston’s foreclose rate is on a sharp rate of increase. There were 24 foreclosures in 2004 and 60 in 2005. As of Oct. 4, there had been 180 total foreclosures to date in 2006, putting the city on course for approximately 240 this year.