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THREE years ago, after the government moved in to save big banks from failure, many homeowners facing foreclosure started asking, “Where’s our bailout?” Annmarie Zaparesky got hers. Through an unorthodox program in Massachusetts, Ms. Zaparesky was able to save her home, a white raised ranch in a neighborhood of wide streets, large yards and modest houses in this blue-collar city near Boston. At a time when roughly 20 percent of homeowners owe more than their homes are worth, an innovative program lowered Ms. Zaparesky’s payments and reduced her total debt to something closer to the house’s actual value. The program, run by a nonprofit investment corporation called Boston Community Capital, is helping to bring homeowner debt in line with reality, something many lenders have been reluctant to do even as foreclosures continue to drive down housing prices. Boston Community buys houses out of foreclosure, sells them back to the families that lost them and gives them a new, more affordable mortgage. Ms. Zaparesky and her husband, Bradford, bought the house — their first — in 1995 for $90,000 and moved in with their three children. But a few years later, Mr. Zaparesky learned that he had cancer. The doctors gave him three to five years to live. Mr. Zaparesky was a claims manager for an insurance company, and Ms. Zaparesky had quit her job as a paralegal and begun working as a manager at a Save-A-Lot grocery store (she now manages two stores). Mr. Zaparesky had always handled the couple’s finances. “He was the one with the big paycheck,” she said. In 2002, when property values were rising, he refinanced the house. Ms. Zaparesky said she was unhappy when she learned that he had gotten an adjustable rate loan that lacked even a short fixed-interest rate at the beginning. But she did not protest. “He was dying,” she said. Mr. Zaparesky outlived the doctors’ predictions. But in 2008, when their daughter Danielle got married, he was too sick to attend the wedding. He died a week later. Almost immediately, Ms. Zaparesky, now 53, fell behind on her payments. Although her children were grown, she shared the house with her elderly father. Unused to dealing with bills, Ms. Zaparesky has only a foggy grasp of what happened next. In an interview last month, she said she believed that she had been offered a loan modification under what she called “Obamacare,” but the offer from her mortgage servicer, American Home Mortgage Servicing, came before President Obama took office. It allowed her to make interest-only payments for five years. The payments were to be around $1,100 a month. But even that was too much to handle for Ms. Zaparesky, who was juggling financial responsibilities on her own for the first time. “My world came crashing down,” she said. Ms. Zaparesky and her mortgage servicer disagree about subsequent events. She tried several times to apply for a permanent loan modification, she said, a process she described as “a farce.” She repeatedly faxed and mailed in papers, she said, that she was then told had been lost — a common story among struggling homeowners. American Home Mortgage Servicing, though, prides itself on its ability to work with delinquent borrowers. The company, which will soon change its name to Homeward Residential, said it tried to give her another modification but did not receive the required paperwork. According to the company’s records, Ms. Zaparesky did not qualify for the federal Home Affordable Modification Program because the house was not her primary residence. She said she never moved out of the house. At any rate, the foreclosure process began in August of last year. At that point, she owed about $200,000. “They just kept saying nope, nope, nope,” Ms. Zaparesky said. “All they cared about was, Let’s foreclose on the house. You’d think they would work with me instead of having another house foreclose.” Despair was close at hand. “I did wake up one morning and said, ‘That’s it: I’m not going to fight anymore,’ ” Ms. Zaparesky said. “I was on a roller coaster.” At about that point, she heard about Boston Community Capital from a local mortgage counselor. The group has tried to prevent evictions and vacancies through an initiative it calls SUN, or Stabilizing Urban Neighborhoods. The concept is predicated on the fact that homes in foreclosure usually sell at distressed prices, which are even lower than the home’s already depressed fair market value. When homeowners default, Boston Community offers to buy their homes, either from the bank or from the owners in a short sale approved by the bank. If the bank consents, Boston Community buys the homes at the distressed value and sells them back to the homeowners at something closer to market value, which is usually substantially less than they had owed. To qualify for the program, the homeowner must have experienced hardship, like job loss or illness, and must demonstrate the ability to make the new payment. In Ms. Zaparesky’s case, her boyfriend, who is now living in the house, signed on to help. The homeowner also makes a $5,000 down payment. If the house is later sold at a profit, Boston Community is entitled to half the proceeds. The program is two years old and has just begun to near its goal of roughly 10 mortgages a month.
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