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Statement of Need

The foreclosure crisis has created catastrophic instability for both families hit by foreclosure and for communities which have experienced a high rate of foreclosures. It is estimated that of all those who present the need for shelter assistance in Massachusetts, eight percent are of foreclosed families. It is perhaps too obvious to state the effect of homelessness and instability on families, particularly the school-aged children in these families, whether former tenants or homeowners. 

This crisis has also had a disparate impact on people of color. In census tracts in Massachusetts where over 60 percent of the population is people of color, the level of foreclosure distress is over 180 percent the statewide level, compared to tracts that are less than 40 percent minority, where rates of foreclosure distress are less than 80 percent of the statewide rate. Census tracts where the foreclosure distress rate is at least twice the rate of the state as a whole contain 11 percent of the state's population, but 36 percent of the Black/African American population and 27 percent of the Hispanic/Latino population. 

The reclamation of foreclosed properties has not been sufficiently addressed at a large enough scale. From 2007 through 2011, 4,040 homes were foreclosed in Boston, but, according to data from the MA Housing Investment Corp., only 45 properties had been addressed with the Neighborhood Stabilization Loan Funds. 

 Signs of recovery in the housing market make it easy to assume that the foreclosure crisis is behind us. And yet, the risk of displacement due to foreclosure still looms for so many families in Massachusetts and across the country, often putting our most vulnerable low-income households at further risk of instability and homelessness. According to RealtyTrac's April 2014 U.S. Foreclosure Market Report, there is still a lingering inventory of nearly half a million already-foreclosed homes that still need to be sold - only 10% of which were are listed for sale and more than half were still occupied by the former homeowner or tenant. In addition, Realty Trac's May 2014 report shows an a sharp uptick foreclosure starts in Massachusetts in May 2014 - up 178 percent from the previous month to a 15-month high - as well as an annual increase in foreclosure activity in Massachusetts, which is up 58 percent from a year ago to an 18-month high. Nearly 7 years after the housing bubble burst, there have been no widespread policies, programs, or initiatives implemented that would responsibly address occupied foreclosed property, and our concern is that this crisis is far from over. The main challenge therefore, that the COHIF Pilot Project and Strategic Initiatives will address is the issue of displacement and risk of homelessness when a property goes into foreclosure, the deterioration of REO property, and the resulting community and family instability that follows from high rates of displacement and distressed properties in hard hit areas of foreclosure.