Five Questions With: John Nimmo

John Nimmo is senior housing counselor at NeighborWorks Blackstone River Valley.
John Nimmo is senior housing counselor at NeighborWorks Blackstone River Valley.

John Nimmo is senior housing counselor at NeighborWorks Blackstone River Valley, a community development corporation that serves several communities in northern Rhode Island. He was praised recently by state officials for helping to direct homeowners having difficulty paying their mortgages to a nonprofit program, the SUN Initiative, which allows them to sell and repurchase their houses under more affordable terms. A new state law allows homeowners facing foreclosure to remain in their homes, if they sell to a community development agency for this purpose. Nimmo responded recently to questions about the process posed by Providence Business News.
PBN: What is the nonprofit SUN Initiative?
NIMMO:
The Sun Initiative is a program developed by a nonprofit organization headquartered in Boston, by the name of Boston Community Capital, which is a community development financial institution.
PBN: The legislation approved this session will help keep homeowners in their houses, through modified loans created by nonprofits. Do you know how many people might be affected by this? How many cases have you had through your work?
NIMMO:
I have successfully managed one family so far, although I have referred 14 families. One reason why this has not worked for all is that this legislation had not been passed. Lenders were a little hesitant in allowing people to use the program. I believe that others will soon become involved. The program works in two different ways, and I have referred people under both programs.
PBN: How does it work?
NIMMO:
The homeowner must, according to law, be able to afford the new loan. [In this case] Boston Community Capital purchases the house from the lender and resells the house to the borrower with a new loan. The house may be deeply underwater and the resale price may be sent on to the borrower. The interest rate is set, at the moment at 6.375 percent, a bit higher, however the payment may be made affordable by the much lower principal of the loan. [Under another provision], the borrower may be behind on the mortgage, is able to make the payments even at the higher interest, but the lender is not willing to make a modification on the loan. Boston Community Capital, again purchases the house from the lender and sells it back to the homeowner.
PBN: Will NeighborWorks Blackstone River Valley be participating in this?
NIMMO:
NBRV NeighborWorks utilizes the program as a backup to our loss mitigation programs. When the lender refuses to make a modification, we refer people first here to see if they would qualify and if not, to Rhode Island Legal Services, for assistance.
PBN: What is the role of the nonprofit that participates in this? Is it essentially the new lender? If so, what protections does it have if an owner defaults on the new mortgage?
NIMMO:
The new lender becomes the owner of the mortgage and, if the person does not pay their mortgage, has the right through both the promissory note and the mortgage to foreclose upon the mortgage with the borrower being protected under the laws of Rhode Island, as to their rights.

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