While the Treasury Department deploys resources to help struggling homeowners refinance unaffordable mortgages and Congress debates the merits of Sen. Dick Durbin’s bankruptcy modification measure, institutions at the local level are ratcheting up their own efforts to keep people in their homes.
According to Chi-Town Daily News reporter Megan Cottrell, the good folks at the Chicago Community Trust are investing $5 million in ShoreBank’s innovative rescue loan program. The legendary South Side community development bank launched the initiative in 2007 to assist Chicagoans snowed under by adjustable rate mortgages. As ShoreBank co-founder Ron Grzywinski explained to us back in October, the program allows borrowers -- most of whom would have qualified for conventional loans -- an opportunity to refinance their overpriced mortgages into fixed mortgages at reasonable rates with ShoreBank, thereby reducing monthly costs and securing equity and community stability.
Just like the MacArthur Foundation, CCT recognizes both the value in the program and the immense need for action. Without intervention, the Center for Responsive Lending estimates that 103,000 Illinois households will go into foreclosure this year and 342,800 will risk losing their homes in the next four years.
For more on this problem, check out Bob Palmer’s Progress Illinois column from January.
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