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Massachusetts Nonprofit BlueHub Earned $360,000 Profit on Foreclosured Everett home
BlueHub Capital, the Massachusetts non-profit lending company whose millionaire non-profit CEO Elyse Cherry is a long-time friend of Governor Maura Healey, profited over $360,000 (a 393% return) on just one of the properties it purchased through it’s program that sought to help homeowners avoid foreclosure. The nonprofit boasts on their website that they’ve provided nearly 1,000 mortgage loans to families facing foreclosure.
Fall River Reporter has learned that BlueHub, which is currently being sued by Massachusetts homeowners who say they were victims of predatory lending tactics, purchased a home belonging to married couple Carlos Perdomo and Rose Ochaoa back in 2012. The couple fell behind on their mortgage payments for their 55 Bow Street home in Everett, MA and connected with BlueHub Capital (then called Boston Community Capital) to help them keep their home.
BlueHub Capital offers a program where they purchase properties from either the bank or the homeowner and then sell the property back to the homeowner, often with an above average interest rate.
For the Bow Street property, BlueHub purchased the home from the couple in a short sale for $125,000. On the very same day, BlueHub sold the property back to Perdomo and Ochoa for $171,000, profiting $46,000 in the transaction.
But like many of the mortgages that BlueHub provided to customers, a secondary mortgage was issued for the property for shared appreciation of the home. These second mortgages meant that BlueHub was to receive a percentage of the appreciation of the home, which was to be paid either when the homeowner refinanced the loan or sold the property. In some instances, BlueHub wrote these secondary mortgages where they could receive up to 50% of the appreciation value in a home.
In the instance of the 55 Bow Street property, Mr. Perdomo and Ms. Ochoa were required to pay BlueHub a 50% share of the appreciation value if they refinanced or sold. Seven years after they purchased their home, agents for the Encore Casino approached Perdomo and Ochoa with an interest in their property for the potential development.
The couple sold their home for $800,000 but before they would release the secondary mortgage on the property, BlueHub wanted their 50% and according to court documents, the couple agreed to pay BlueHub Capital $314,000 from the sale.
Court documents assert that BlueHub violated Massachusetts General Law 271, S. 49 which limits lenders to a 20% interest cap.
BlueHub earned $360,000 on the two transactions, equating to a 393% return on it’s initial investment.
Last month, Massachusetts legislators passed Governor Maura Healey’s Economic Development bill, where section 269 gave protection to companies like BlueHub Capital from future legal action. Fall River Reporter uncovered the deep connection between Healey and BlueHub Capital CEO Elyse Cherry, including Cherry making numerous personal donations to Healey as well as hosting fundraising events for Healey. Tax documents for Cherry show she earned close to a million dollars in 2022 as the Chief Executive Officer of BlueHub Capital.
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