I have mentioned this many times but here goes. The City has lent out lots of monies in the forms of what are called "soft" seconds. They are "soft" in the sense the underlying home-owner, low to mod income owner, does not have to actual make payments on the mortgage.
Here is how it works a CDC sells a house for $200,000 and the home-owner gets a real mortgage for say $170,000 that they make payments on. The City of Worcester kicks in the other $30,000 through their HOME funds from HUD, which the home-owner does not pay back. In the end the CDC walks away with $200,000, the home-owner typically puts down little or no cash and the second of Worcester has liability for the $30,000.
What liability? Well, if a person who is not low-mod income takes ownership during the affordability period, typically 15 years but I have seen longer, the City of Worcester (not the CDC) owes $30,000 to HUD. There are already alot of these soft second mortgages that have violated the affordability period that they City of Worcester now has to pay back. I hope someone inquiries into this and ask for a report detailing what we owe.
Can Worcester help solve Boston's problem? -
8 hours ago