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Housing Advocates Say Settlement is Not Enough

Thursday, September 27, 2012

 

Massachusetts borrowers hit by the foreclosure crisis are eligible for roughly $14.6 million in cash payments as part of the $25 billion national mortgage settlement, but some Central Mass housing advocates said the money will barely scratch the surface of the state's housing woes.

Attorney General Martha Coakley's office announced on Wednesday that claim forms are being sent to the more than 21,000 eligible borrowers in the Commonwealth who lost their homes to foreclosure between January 2008 and the end of 2011.

“Our office worked hard to ensure the best possible outcome for Massachusetts borrowers through the national settlement and will continue to provide assistance to distressed homeowners through our settlement funded HomeCorps program,” Coakley said.

“These payments will help those who were foreclosed in recent years by entities we allege didn’t follow proper servicing standards.”

The settlement came through in April of this year, and Massachusetts received a $44.5 million direct payment of its own, which has been used to launch the Attorney General's HomeCorps program offering support and advocacy to distressed borrowers throughout the state.

Claim forms will be sent out around the Bay State between now and October 12, and the deadline to file all claims is January 18, 2013. The cash payments are expected to be sent out mid-2013.

While $14.6 million may seem like a lot of money, Martha Assefa, community organizer for the Worcester Anti-Foreclosure Team, said the state has also seen a lot of foreclosures.

"If everyone gets the same amount, that's not a lot of money."

Split evenly between 21,000 borrowers, the $14.6 million settlement works out to about $700 per foreclosure, which Assefa said was "a drop in the bucket" for someone who may have lost their home over four years ago.

Still, every dollar counts.

"It's not much in the grand scheme of things," she said, "but we will be making sure whoever we're working with will apply and see what happens with the process."

Assefa said another potential issue is that many borrowers who might be eligible for those cash payments have already been scared out of their homes and will never learn of the claim forms.

"People still are learning their rights."

The fact that filing a payment claim for the newly available funds will not affect any other outstanding legal claims was a plus for Assefa in Wednesday's announcement.

"I am glad that them applying for this does not waive any of their rights," she said.

With about 90 active members, the Worcester Anti-Foreclosure Team runs a comprehensive outreach program, which includes knocking on doors every weekend to tell borrowers about their rights and help walk them through the various application processes for assistance and relief.

"Obviously we're going to be working with our members from any of the banks to see if they did qualify from that period and make sure that they submit whatever paperwork is necessary," Assefa said.
 

 

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