“Why do I have to give you all this money?” She remembered asking Boston Community Capital officials. “I haven’t been late for five years and my credit is good. It woke me up. If this happened to me, who else did it happen to?

This supplement – called “shared appreciation” – is at the heart of a class action lawsuit filed Friday alleging a “predatory loan” against an organization more accustomed to distinctions than accusations. And it raises questions about the best and fairest way to help people facing foreclosure on their homes.

With a shared appreciation mortgage, borrowers agree to share any increase in the value of their home with the lender each time they sell or refinance the home. In a real estate market where prices have increased by more than 50% since 2012, this can translate into hundreds of thousands of dollars of appreciation for the borrower to pay.

Dozens of people who borrowed from Boston Community Capital, which changed its name to BlueHub Capital in 2018, say they belatedly found out that they had accepted a shared appreciation mortgage.

In each case, the borrowers said they did not have a lawyer at closing and that no one correctly explained the “shared appreciation” agreement, which included a requirement not to talk about the terms of the loan. the agreement.

“The reckless, unrepresented and desperate homeowner, already foreclosed or threatened with foreclosure, is trapped by (BlueHub) in a mortgage that is over 30 years old, well above the market rate with an additional and giant final payment coming out of the borrowers “the equity of their only asset, their house”, alleges the lawsuit.

The lawsuit also alleges that when borrowers fall too far behind on their BlueHub mortgages, the agency “aggressively shuts down”, sometimes forcing out the people they decide to help.

BlueHub officials say their Stabilisating Urban Neighborhoods Initiative, or SUN, has helped 1,100 homeowners at risk of foreclosure, allowing them to stay in their homes while dramatically reducing monthly mortgage payments. BlueHub officials say 93% of borrowers make their payments on time.

Borrowers pay above-market interest (5.625-7.5%) and they must share any increases in their home’s value with BlueHub, but BlueHub officials say the terms are fully explained – orally and in writing. All borrowers must sign a “shared appreciation” mortgage acceptance form.

Sara Jane Shanahan, an attorney for BlueHub, told plaintiffs’ attorneys that all of their clients saved money by working with BlueHub, even after the shared appreciation payment. In addition, they must keep their homes.

“Without the SUN program, your clients would not have received any appreciation because they would have lost their homes to foreclosure,” Shanahan wrote.

But some wonder if BlueHub’s loan terms are clear enough for homeowners who are desperate for a way to prevent foreclosure. Several plaintiffs said they did not recall any briefing about the possibility of a large payment to BlueHub on the sale or refinance.

BlueHub’s “shared appreciation” loan program is unusual in the struggling homeowner industry, according to home finance experts. Some nonprofits and government agencies offer shared appreciation mortgages to help low-income homebuyers pay the down payment, but it’s hard to find a similar program to help people escape foreclosure. . Other housing advocates say there is a good reason for this.

“It’s all about the mission,” said John Taylor, president and founder of the Washington DC-based National Community Reinvestment Coalition, which could only think of one similar program from a distance. “If it’s to help the traditionally underserved and those struggling with homeownership, is that the best solution? “

Bruce Marks, whose Jamaica Plain-based group Neighborhood Assistance Corporation of America is funding the lawsuit, said BlueHub routinely exploits people in times of need.

“In 35 years of fighting predatory lending, we’ve never seen this type of shared appreciation – a shared appreciation that steals hundreds of thousands of dollars of homeowners’ equity in their property,” Marks said.

BlueHub has grown considerably over the years. In its 35-year history, the organization estimates that it has invested or raised more than $ 10 billion for housing, schools, health facilities and other businesses.

But critics say BlueHub operates too much like a for-profit business. For example, tThe agency’s chief executive, Elyse Cherry, was paid $ 736,803 in 2018, which BlueHub officials say is based on a review of salaries from other organizations and comparable to the pay of executives at major organizations. nonprofits such as WGBH and the Boston Foundation. However, housing advocate Marks, who also helps struggling homeowners, made just $ 150,000 in 2017, according to his organization’s tax return.

Jon Skarin, executive vice president of the Massachusetts Bankers Association, said the SUN program seems like a good investment for BlueHub from the start, when they buy homes at a discount from lenders, until the end, when they get a share of the increase in the value of the property.

The loans “are structured to minimize their risk as much as possible and that’s it: higher interest rates, different loan pricing, shared appreciation,” Skarin said.

BlueHub officials say they don’t make a profit – and the profits flow back into the business, allowing them to help more people or pay investors. They also said the share appreciation mortgages offered by other lenders have survived legal challenges.

The lawsuit, filed in Suffolk Superior Court by attorneys David Kelston and Jeffrey Wiesner, arose directly from Nardella Thomas’ disagreement with what was then Boston Community Capital. Thomas initially researched the group after seeing a glowing article about the group’s help to distressed homeowners on a network newscast.

But after his request for shared appreciation mortgage relief was rejected, Thomas started an online petition against BlueHub’s lending practices, signed by more than 250 people, and helped organize dozens of events. ‘BlueHub borrowers who say they don’t realize it until they try to sell or refinance that they had agreed to make a potentially large payment to BlueHub.

They started to meet at Marks’ office. And they started to tell their stories.

When Ursula Humes bought her Dorchester home from BlueHub in 2010, she was handed a stack of documents she did not understand. She said she asked for time to think it over, but felt compelled to sign on the spot. She became so distressed, she said, that she left the closure in tears.

When Humes attempted to refinance in 2017 to lower her monthly bills, she made a difficult discovery: She owed Boston Community Capital more than $ 200,000 in shared appreciation to close the loan.

“My hands are tied,” said Humes, a retired MBTA police prosecutor. “I feel totally defeated.”

A spokesperson for BlueHub said the agency had worked with Humes for 18 months before the shutdown and was unaware she felt pressured to sign documents.

Ms. Humes went from someone who had no equity in her home – in fact, she had already lost ownership of it – to someone who now has the equity in that home worth ‘about $ 250,000, even after paying his shared appreciation,’ BlueHub spokesperson Doug Bailey said.

Two other plaintiffs were originally Blue Hub fans when it came to Boston Community Capital and had just launched the “shared appreciation” loan program.

Badrul Khan was one of the first clients of the SUN program; the agency saved his house from Revere in 2010, just as the auctioneers were about to sell it under him and his family.

Boston Community Capital “was just a helping hand,” Khan told the Revere Journal in 2011. “People have listened to you. They come to explain everything and give consolation and loneliness in a crazy situation.

But three years later, when his wife fell ill and they lost $ 9,000 on monthly payments, Boston Community Capital foreclosed and repossessed the house, although he was allowed to rent the house for a year. and half. Khan was bitter when he saw that Boston Community Capital sold his old house to someone else for $ 100,000 more than he owed on the mortgage.

“I thought they were my saviors. But now I know they prey on people when they feel vulnerable and ashamed, ”Khan said.

The BlueHub spokesperson said of Khan: “He defaulted, went into foreclosure and his house was sold.”

Cheryl Ortiz was living with her husband and four children at their Southbridge home in 2010 when her husband ruptured a disc in his back, was diagnosed with cancer and his graduate loans expired. The value of the house had fallen so much that refinancing was not an option.

After an unsuccessful attempt to sell the house, they moved to what was then Boston Community Capital in 2013. In an interview with PBS “Newshour” in 2015, Ortiz said that with the help of the group, “We have a great place to live My kids have their friends.

But her perspective changed two years after the interview aired when she went to refinance and learned she couldn’t close the deal until she paid $ 39,520 in shared appreciation.

“Yes, I got my house back” thanks to BlueHub, Ortiz said. “But you didn’t know what was coming: the bomb that will fall on you the day you go to refinance.”

Ortiz said the group would not consider any changes to the terms of its loan.

“No negotiation. No, nothing, ”she said.

Plaintiffs in the lawsuit want a judge to set aside or at least cap their shared appreciation mortgages, prohibit the agency from charging a mark-up when it sells homes to borrowers, and return all “illegal” profits. They also seek unspecified damages and attorneys’ fees.

In response to plaintiffs’ demands, BlueHub offered to cancel loans from some borrowers if they agreed to turn their homes over to the agency. The offer was rejected, lawyers for the plaintiffs said.