Programme by Boston Community Capital prevents Foreclosures

A programme initiated by Boston Community Capital has been able to prevent foreclosures. Since its start nearly 70 houses have been sold back or rented out to foreclosed owners. None have defaulted again.

Reduction of principal is not something unknown in the financial history of America – rather it has been quite common. During the 80s farm crisis, young farmers who had purchased land for farming at high prices suddenly saw the price of their crops drop together with a tumble in the price of land. It was a debt crisis not far removed to what is happening today when the borrowers who have lost their jobs are now finding the value of their properties to be less than the loan due amount.

Seeing the disaster accelerate in the rural sector, Congress introduced in the bankruptcy code a new chapter. It permitted the judges dealing with bankruptcy to go ahead with modification of loans inclusive of partial waiving of principal. This prevented many farmers and their families from being evicted.

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