The Brockton Housing Partnership, whose member banks include Waterbury, Conn.-based Webster Bank, is assisting in the restructuring of loans made to borrowers on Boston’s South Shore.

In an effort to help homeowners struggling to pay higher monthly mortgage payments as interest rates have climbed, a group comprised of lenders and nonprofit organizations is helping borrowers on Boston’s South Shore restructure their loans.

The Brockton Housing Partnership will begin offering low- and moderate-income homeowners who purchased or refinanced their homes with interest-only or adjustable-rate mortgages access to a lending program that offers several benefits, including long-term fixed interest rates and lower-cost mortgage insurance premiums.

The initiative also is designed to assist homeowners in the early stages of foreclosure, as well as prospective homebuyers – preventing them from obtaining risky subprime and predatory loans.

The effort comes at a time when housing and consumer advocates are growing increasingly concerned by news that foreclosure filings have jumped dramatically in Massachusetts, as borrowers who used adjustable-rate mortgages and other types of non-traditional loans and stretched to purchase pricey homes are now feeling the squeeze of higher monthly mortgage payments because interest rates have risen.

“Increasingly, we’re getting a lot of calls from Â… borrowers who got an adjustable-rate mortgage or other types of subprime mortgages and they’re concerned, either because they’re having trouble paying it already or they’re worried that they’re going to have trouble paying it when it adjusts,” said Thomas Callahan, executive director of the Massachusetts Affordable Housing Alliance. MAHA, a statewide group that helps those with low and moderate incomes purchase homes, often ends up referring homeowners to organizations like the Ecumenical Social Action Committee – a group based in Boston’s Jamaica Plain neighborhood that helps people who are in danger of losing their homes through foreclosure.

But assisting homeowners who have non-traditional loans and are struggling to maintain their housing can be a tough challenge.

“One of the problems is that a lot of these subprime loans have significant prepayment penalties, so to get them out of the loans is quite costly,” said Callahan.

On the South Shore, the Brockton Housing Partnership is urging homeowners and prospective homebuyers to consider refinancing or buying their homes using MyCommunity Mortgage, a conventional mortgage product developed by Fannie Mae.

Brockton-area banks and credit unions that are part of the partnership will be accessing the MyCommunity Mortgage through loan funds available from MassHousing.

Housing advocates are hoping that the Brockton Housing Partnership’s effort will be replicated in other parts of the Bay State.

“We think this will serve as a blueprint for other types of initiatives statewide,” said Peter S. Milewski, director of the Mortgage Insurance Fund and manager of business development at MassHousing.

The MyCommunity Mortgage product offers the typical safe frameworks of a 30-year fixed-rate loan and allows for financing flexibility, such as loan-to-value ratios of up to 100 percent, flexible income sources and lower credit score histories, explained Milewski.

‘Stepping Up’
Carol DeLorey, a Brockton resident and organizer for the Brockton Interfaith Community/Nehemiah – an organization that is developing housing for working families – said the Boston Housing Partnership’s initiative is greatly needed, adding that she has seen members of her own church who are struggling to keep their housing.

“I’m thrilled at how quickly the housing partnership is stepping up to help people,” she said.

DeLorey said the Brockton Interfaith Community will inform church members about the help they can receive through the partnership’s initiative.

The MyCommunity Mortgage originally was intended for first-time homebuyers, but members of the partnership realized that it also could be used to help homeowners with adjustable-rate loans who were having trouble making higher monthly mortgage payments, according to Leo MacNeil, senior vice president of marketing at HarborOne Credit Union and a former chairman of the Brockton Housing Partnership.

MacNeil said the program will be available only to consumers who still have a good credit history.

A press release announcing the program that was sent out by MassHousing explains how the program can be a more favorable financing option for borrowers:

Some homebuyers try to avoid paying mortgage insurance premiums by obtaining what’s known as a piggyback loan – a first loan with a fairly low interest rate and a second mortgage with a much higher rate that could adjust even higher and which has as shorter repayment requirement than the first loan.

In such a situation, homebuyers who need to borrow $250,000, for example, may receive a 30-year first mortgage loan for $200,000 with a 7.5 percent interest rate and a 15-year second loan for $50,000 at 9.75 percent. The total monthly payment – including property tax and insurance – would be $2,153 with a piggyback loan. But the same borrower, using the MyCommunity Mortgage program for a $250,000 loan, could expect to receive a 30-year fixed-rate loan with a 7 percent interest rate. Even with mortgage insurance premium of $122 included, the total monthly payment would be about $142 less per month than the piggyback loan.

More than 40 loan officers and originators have signed up to attend a workshop on Wednesday at Stonehill College that will provide training to offer the MyCommunity Mortgage product to consumers, said MacNeil.

MacNeil said he is preparing brochures about the lending program in four different languages that local community groups and churches will be able to distribute to homeowners and homebuyers.

The Brockton Housing Partnership, which was established in 1992, consists of: Bank of Canton, Bridgewater Credit Union, Citizens Bank, Crescent Credit Union, Eastern Bank, HarborOne Credit Union, North Easton Savings Bank, Rockland Trust, Security Federal Savings Bank, Sovereign Bank, The Community Bank, Webster Bank and Uniti Credit Union.

Affiliate members are the Brockton Housing Authority, Brockton Interfaith Community, Brockton Redevelopment Authority, City of Brockton, Fannie Mae, Neighborhood Services of the South Shore, Plymouth County Housing Alliance and South Shore Housing Development Corp.