Some SUN on foreclosures

LISA SHEPARD followed the rules.

She got a good education. She became a registered nurse and then got a law degree. Her schooling led to a good job in health-care management. She bought a home she could afford in Jessup, Md. She lived within her means.

Then the recession hit. We spiraled into a housing crisis that sank the financially irresponsible and those preyed upon by predatory lenders. But it also dragged down people like Shepard, who lost her job in 2011.

"I went from six figures to no figures," says Shepard, 52, who is the caregiver for her 10-year-old daughter as well as her ailing 72-year-old father.

Shepard worked at several jobs for which she was often overqualified to bring in enough money to cover her mortgage and other bare-bones expenses, she says. It wasn't until 2013 that she became gainfully employed again. By the time she found the job, her home had gone into foreclosure.

But this story isn't just about Shepard. It's about the many people who are still facing foreclosure, many through no fault of their own.

In September, foreclosure filings were down 19 percent from a year ago, the lowest level since July 2006, according to RealtyTrac. However, filings were up slightly for the third quarter with 22 states posting year-over-year increases in scheduled foreclosure auctions. Florida, Maryland and New Jersey had the highest foreclosure rates in the third quarter.

"A recent rise in scheduled foreclosure auctions in many markets across the country shows lenders are continuing to clean house of lingering delinquent loans," said Daren Blomquist, vice president at RealtyTrac.

So what's the best strategy to help people keep their homes?

The housing crisis was so deep and so troubling that we need to be open to helping homeowners in various ways. Even then, many people who are still struggling to bring in enough income may have to let their homes be foreclosed. Others, in better situations, may best be served by getting a loan modification. In some cases, it might be necessary to reduce people's principals, bringing their mortgages in line with current market prices.

And then there is an innovative solution that helped Shepard save her home. She was one of the first homeowners in Maryland to be rescued from foreclosure through the Boston Community Capital Stabilizing Urban Neighborhoods Initiative, or SUN. It's an amazing program that specifically targets folks such as Shepard who are back on their feet financially and can afford to stay in their homes if the price is right.

Under the program, the nonprofit negotiates with the homeowner's lender to purchase the home at the current market value. The group then sells the home to the existing homeowner with a more affordable fixed-rate 30-year mortgage. To qualify for the program, the home has to be in foreclosure or about to be in foreclosure, or the homeowners are awaiting eviction due to a foreclosure. You have to have a steady income that can support a mortgage. There is no fee to apply. The program began in Massachusetts but has expanded to Maryland and Rhode Island. It should be in more states. So far, more than 500 families facing foreclosure have been able to reduce their monthly mortgage payments and principal balances, on average, by 38 percent.

SUN cut Shepard's 30-year mortgage from $352,218 to $273,000, and her monthly payments from $2,433 to $2,037. It was enough of a break to make her mortgage affordable. Shepard was referred to the SUN program by the HUD-approved home counseling agency HomeFree-USA after previous attempts failed to modify her mortgage.

"We recognized she clearly had been financially responsible prior to her hardship," said Phyllis Ellis, vice president of Home Ownership Preservation for HomeFree. "Even though the servicer wouldn't take her [partial] payments, she still put the money aside. That is the key. She exhibited financial responsibility. She showed she really did want to save her home."

The end goal is to "help stabilize a family and neighborhood," said Elyse Cherry, CEO of Boston Community Capital and founder of the SUN Program.

"This house is our foundation," Shepard said. "The SUN program has allowed me to come through the storm and remain stable. It's best to keep people where they are if they can afford it."

Yes, it is. It's best for all of us.