Tenants get break in foreclosure plan
Boston will buy 5 buildings, allowing occupants to stay
The city of Boston plans to purchase foreclosed apartment buildings still occupied by tenants in an effort to stem evictions under a pilot program officials say is the first of its kind in the nation.
Mayor Thomas M. Menino today is expected to unveil the buyback program, which will initially involve 12 apartments in five properties owned by Bank of America Corp. that are located in neighborhoods devastated by foreclosures in recent years.
Menino said that over the next six months he wants to expand the program to include other lenders and buy as many as 100 occupied apartments.
The city has not yet negotiated a price with Bank of America, but the money to buy the five buildings will come from $8.2 million in federal funds set aside to buy and renovate foreclosed homes.
The properties will then be resold to homeowners, nonprofit groups, or private developers. City officials said they have also applied for another $39 million under the federal Neighborhood Stabilization Program.
Although the program is being made public six days before the mayoral election, Menino insisted the timing was not motivated by politics. He said the intention is to demonstrate to federal officials that the city is at the forefront of antiforeclosure initiatives as it seeks more funding.
“The tenants are the victims. It is not the their fault they were foreclosed upon,’’ he said. “Not only is this good for the tenants it is also good for the neighborhoods.’’
Renters are increasingly being forced to vacate homes reclaimed by lenders through foreclosure auctions. In Boston, more than 75 percent of those displaced through foreclosure are tenants with no direct involvement in the owner’s mortgage problems, city officials estimate.
Traditionally, lenders have been reluctant to sell foreclosed apartment buildings that remain occupied because of liability and other issues. Often, they resort to evictions or strike deals known as “cash for keys’’ in which tenants are given money to move out.
Lisa Alberghini, cochairwoman of Coalition for Occupied Homes in Foreclosure, a local housing group, said she is pleased the city has taken the initiative in assisting renters living in foreclosed properties.
“The idea that the bank agrees to sell properties with tenants still in them and the city has the opportunity to dispose of them without displacing the tenants, it’s just remarkable,’’ said Alberghini, president of the Planning Office for Urban Affairs, a nonprofit housing development group affiliated with the Catholic Archdiocese of Boston. “I hope it prompts others to step forward and do the same.’’
Tom Lin, a senior vice president at Bank of America, said the program is an innovative way to stabilize neighborhoods as well as to allow lenders to unload properties.
Generally, foreclosed homes “sell much quicker vacant than occupied,’’ he said, but lenders are beginning to consider alternatives. Bank of America’s portfolio includes about 330 foreclosed Massachusetts properties, Lin said.
Boston housing chief Evelyn Friedman said tenants of the 12 apartments being bought are unaware of the plan, but that they will soon be contacted. The program builds on an ongoing campaign to purchase abandoned foreclosed properties in hard-hit areas of Dorchester, Roxbury, and Mattapan, she said. Since last year, the city has bought 10 vacant buildings and is in the process of closing deals on 28 others.
Tenant organizers yesterday praised the fledgling buyback program.
“This is a good thing for occupied tenant buildings,’’ said Steve Meacham, a community organizer with the Jamaica Plain housing organization City Life/Vida Urbana. “It is certainly a step forward.’’
Jenifer McKim can be reached at jmckim@globe.com. 
