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Reuters Features BCC's SUN Initiative

Friday, January 20, 2012

Boston Community Capital's SUN Initiative was featured in the Reuters article, "Underwater homes deal may be economy's saving grace."  The article, written by John Wasik, explains that though rare, it is possible to negotiate with your lender to reduce your principal and it could provide a boost to the U.S. housing market.

Wasik writes: "The potential number of homeowners who could be helped by this strategy is huge: About one in five mortgages are currently underwater, representing about $700 billion in negative equity, the Federal Reserve estimates. Many of those homeowners go into "strategic default" and foreclosure because it makes little or no economic sense to pay on a mortgage that's worth more than their home. Up to 1 million of these homeowners may be allowed to do principal writedowns if state attorneys general reach a settlement with banks over questionable foreclosure practices, said Shaun Donovan, U.S. Housing and Urban Development secretary.
 
"The idea of principal reduction to save homeowners from foreclosure is rapidly gaining traction across the country. Bank of America has entered into a pilot program with the Boston non-profit Boston Community Capital to reduce the amount borrowers owe. Trial programs are also under way in Arizona, California and Nevada."

Read the article here