U.S. News & World Report Features BCC's SUN Initiative

Boston Community Capital's SUN Initiative was featured in the U.S. News & World Report article, "How to Fix the Underwater Mortgage Problem."  The article, written by John Vogel, explains that one potential solution to solving the issue of underwater mortgages is shared appreciation.

Vogel explains: "One potential solution is shared appreciation mortgages. Essentially, in exchange for a reduction in their mortgage principal, homeowners would give up some percentage (I recommend 50 percent) of the future appreciation on their house when it is sold. This is a complex instrument, but I believe it could be simplified and standardized. The loan reduction could be based on a simple appraisal and the lenders share of future appreciation would be 50 percent of the difference between the future sales price and the appraisal."

 
"Shared appreciation mortgages are not new. Community development corporations have been using them successfully for years to ensure that affordable housing stays affordable. Institutional investors have also used this structure for years in financing commercial properties. Recently, Boston Community Capital has been using this technique as a foreclosure prevention mechanism, enabling families to avoid foreclosure. Lenders have found that working with Boston Community Capital, they receive more money than they would get through the foreclosure process."
 
Read the article here
Boston Community Capital
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Boston, MA 02119-3236
Phone: 617.427.8600