With hundreds of Boston families facing the threat of foreclosure in the next year, City Hall is responding with a novel plan to field an army of area lawyers to help homeowners, for free, to stay in their homes.
About 750 adjustable-rate mortgages, those with initially low interest rates that balloon after a few years, are scheduled to reset to higher rates between May and October this year, according to data compiled by the city's new Foreclosure Intervention Team.
With each rate hike comes another potential foreclosure, as homeowners face skyrocketing monthly payments. Each foreclosure probably means another abandoned house on a neighborhood street.
So the city's Department of Neighborhood Development plans to refer homeowners threatened with foreclosure and tenants facing eviction to lawyers with the Boston Real Estate Bar Association. The lawyers, who have agreed to take the cases pro bono for city residents whose incomes fall below 80 percent of median income, will handle their cases, including actions to block lenders from improper foreclosures, analyzing refinancing options, or seeking bankruptcy protection.
"One of the biggest gaps we've seen is the lack of legal assistance for homeowners facing foreclosure," said Aaron Gornstein, executive director of the Citizens' Housing and Planning Association. "It's a very complicated process that could be intimidating and overwhelming. And homeowners simply can't afford in most cases to pay an attorney to help them."
The offer of free legal help follows other city-based efforts to deal with rising foreclosure rates, a national problem with distinctly local effects.
"Boston is doing a significant amount to work with homeowners to try to prevent foreclosures, certainly more than most other cities around the country," Gornstein said.
Bill Cotter of the Department of Neighborhood Development's Home Center said the city already has information on about 500 active cases that could potentially benefit from a lawyer's help.
"The first step is to help people in foreclosure," said Kurt A. James, chairman of the affordable housing committee of the Boston Real Estate Bar Association.
Mayor Thomas M. Menino established the Foreclosure Intervention Team earlier this year to connect various departments that handle the negative fallout. Since its establishment, city officials have begun identifying, and in a few cases purchasing, houses abandoned after foreclosures and cleaning up neighborhoods blighted by foreclosures. The city is also contacting tenants to tell them about their rights if their landlord loses a property to foreclosure.
Bruce Marks - chief executive of the Boston-based Neighborhood Assistance Corporation of America, which works aggressively with lenders to get them to restructure predatory loans - said many of the city's efforts are laudable, but that they should be more focused on heading off foreclosures than dealing with their effects.
"The good news is they're trying," he said yesterday. "The bad news is the focus is on process, not on solutions."
City officials also said yesterday that they had contracted with the Dorchester office of nonprofit mortgage broker ACORN Housing Corp. to provide counseling services to area homeowners who face loss of their home.
Theresa Naylor, regional director for ACORN Housing, said workers with the firm would begin seeking homeowners who are facing foreclosures, even if they have not gone to the city for help. She said a lot of homeowners brush off letters from banks or shun help out of embarrassment and then find that it is too late to avoid losing their home.
Menino announced the stepped-up efforts at a Beacon Hill reception honoring author and former federal housing official Nicolas P. Retsinas, whose book "Our Communities, Our Homes," cites Boston's housing efforts. Menino described Retsinas as a key adviser on housing issues.
"Housing is not a stylish issue, but it is of paramount importance to establishing stronger cities," Menino said at the gathering of affordable-housing advocates and bankers.
John C. Drake can be reached at email@example.com.