By Mia Lamar

The city of Somerville suffered a tiny fraction of the statewide foreclosures last year, indicating it has thus far been able to avoid the foreclosure crisis devastating many Massachusetts communities and the nation at large.

Somerville recorded 37 foreclosures last year; more than 7,500 foreclosures were recorded statewide. These numbers do not reflect the number of pre-foreclosure petitions that precede full foreclosures; which was nearly 30,000 in the state of Massachusetts last year, according to Grace Ross, co-founder of the Massachusetts Alliance Against Predatory Lending (MAAPL). Massachusetts Land Court records indicate 501 of these complaints were made within the city of Somerville last year.   

Ward Six Alderman Rebekah Gewirtz, who serves as chair of the Housing and Community Development subcommittee, organized a meeting last week to review Somerville’s place in the mortgage loan and foreclosure crisis. Representatives from various city offices and local agencies, including the city’s office for Strategic Planning and Community Development, the Community Action Agency of Somerville, and Greater Boston Legal Services, gathered to deliver information and observations on the present and future position of Somerville within the foreclosure crisis. City Assessor Dick Brescia reported to the committee that Somerville was in “good shape in terms of the market,” and foreclosures in the city were “minimal.”

Gewirtz said after the meeting that she ordered these reports to ‚Äústay on top of and in front of‚Äù the nationwide mortgage loan and foreclosure crisis and its potential implications within the Somerville community. Gewirtz said she is concerned with the widening effects the issue is having on the national economy. 

“I’m very glad to have brought these players together…to share the best practices and good ideas,” she said.

According to reports made to the committee, a number of potential factors have protected Somerville from a major foreclosure crisis, including the high number of rental units in the city – more than 65 percent of housing units in the city are rental properties.

Certain city programs were also cited as potential salves, including the city’s first-time homebuyer training program, which introduces participants solely to fixed-rate mortgage options, and the city’s Residential Program, which deducts 30 percent from the tax bill of owner-occupied properties. Brescia said the program, which was introduced 15 years ago, was the first of its kind in the state of Massachusetts and “keeps things affordable” for homeowners in Somerville.
               
However, Phil Ercolini, SPCD Director of Housing, conceded that “one is too many,” and confirmed that his office was in a “preliminary” stage to develop an action plan to assist local foreclosure victims.

According to a memo submitted to Gewirtz and the Housing and Community Development Committee, this plan includes installing a channel within the city’s 311 hotline for foreclosure information and outreach, designating a city liaison for foreclosure prevention, and training a SPCD staff member to provide pro-bono legal advice and counseling in foreclosure proceedings. Ercolini added that his office was also working with the Division of Banks to provide $200 million in funding to local action agencies such as the Somerville Community Corporation (SCC).

Still, Somerville may not be entirely off the hook. Persistent volatility in the national economy soured the enthusiasm of many participating members of the meeting.

Melissa McWhinney, director of advocacy for the Community Action Agency of Somerville, told the committee she was not yet confident Somerville would escape the crisis largely unscathed. She said that after seeing the first foreclosure petition in “many, many years” last year, there have since been many more, “over 20 in the last three months.”

“This is alarming,” she said.

Later, McWhinney recalled driving past a boarded-up home on Summer Street a few months ago. She said she was surprised, not remembering there having been a fire at the site, until it occurred to her that the vacated property was a foreclosed home.

“I am worried about what is coming in the next year. As the economy gets worse, I think things are going to get more severe,” she says, adding that vacated properties create neighborhood blight, invite crime, and often drive down neighboring home values. This ripple effect was also cited in state legislative proposals made last week by the Massachusetts Alliance Against Predatory Lending, a consortium of various state delegates and issue advocates, working to enact, among other proposals, a moratorium on foreclosures in Boston.

Many at the meeting agreed that there is a pressing need in Somerville to develop a sophisticated system to identify homeowners nearing foreclosure. In its memo, SPCD stated outreach was “critical,” and “must be conducted earlier before arrearages become unmanageable.” Both McWhinney and Ellen Shachter, an attorney representing Greater Boston Legal Services, expressed frustration at not being able to find individuals at risk of losing their home in time to help them.

“We’re getting them all the way down the pipeline,” said McWhinney.

 
On a quiet, well-kept street in East Somerville, one local woman, who requested anonymity, recalls almost losing her condo, a home she said she purchased because she was “anxious to get out of renting.” She said she fell behind on her loan after her payments were hiked up more than $800 in one month’s time.

 
The woman, a criminal defense attorney, said she understood the risks of the loan and its adjustable rates but didn’t believe they would be raised so high.

“It was just so appealing,” she said.

Just a few short blocks away, another homeowner is not so lucky. The owner of two units in a three unit building, who also requested anonymity, said he has just ten days before the bank forecloses his home. Though his loans were extended at a fixed-rate, he stopped making payments on his mortgage when he realized he was paying far more a month than the current market value of the units, which have depreciated almost 30 percent since he bought his home a year and a half ago, he said. He said he tried to renegotiate his monthly payments, to pay higher end-payments when the market improves, but the bank declined his offers.

“I know it’s wrong,” he said, standing in the front door his home, a narrow three-story building just steps from the dull roar of Washington Street. But, he jokes, with the payments he and his wife must make, they could “buy a mansion.”