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MA Borrowers Finally Get Relief Under Mortgage Settlement

Wednesday, November 21, 2012

 

Distressed borrowers in the Bay State are finally seeing some results from the multi-billion dollar national mortgage settlement, with principal reductions and loan modifications adding up to $266 million in local relief through the end of September.

Attorney General Martha Coakley's office announced that principal reductions and loan modifications for Massachusetts homeowners have jumped up significantly according to the second report on the national mortgage settlement, rising more than six times compared to the first report. The latest report shows that Massachusetts homeowners have received more than $266 million in total relief through the end of September according to numbers provided by the five major banks.

With funds from the national settlement, Coakley formed the HomeCorps program earlier this year to assist Massachusetts homeowners and ensure that borrowers receive the maximum possible benefit under terms of the national settlement, including principal reductions.

“Struggling homeowners in Massachusetts are beginning to receive concrete benefits from the national settlement and we intend to keep pushing for more progress,” Coakley said.

“Our HomeCorps program is working to ensure that Massachusetts’ borrowers get all the relief they are entitled to under this agreement. We believe this ongoing effort to prevent unnecessary foreclosures will help stabilize the housing market and turn our economy around for everybody.”

This most recent report shows a significant increase in Massachusetts homeowners receiving principal reductions, loan modifications, second lien forgiveness and refinances of underwater mortgages within the past three months. This type of relief jumped from a reported 359 Massachusetts borrowers in the first three months, to 2,205 borrowers through September 30. A homeowner must make three on-time monthly payments before a modification becomes permanent and is counted under the settlement agreement.

The second report by the settlement monitor shows that a total of 3,949 homeowners in Massachusetts were provided relief of all kinds for an average of $67,457 per homeowner, which continues to lead all New England states.

The numbers were self-reported by the banks and contain raw or aggregate numbers that cannot yet be used to assess the banks progress toward meeting its $20 billion dollar obligation under the terms of the court ordered settlement agreement. Because the servicers do not receive dollar-for-dollar credit for most forms of homeowner relief, the Attorney General's office said they will actually provide much more relief than the $20 billion required by the settlement.

Under terms of the national settlement with Bank of America, JP Morgan Chase, Wells Fargo, Citigroup and GMAC/Ally, the banks were ordered to provide an estimated $257 million worth of mortgage relief across the Commonwealth and an estimated $14.6 million in cash payments to Bay State borrowers in post-foreclosure relief.

More than 21,000 eligible borrowers in the Commonwealth who lost their homes to foreclosure between January 2008 and the end of 2011 received claim forms this Fall for their share of that $14.6 million. The deadline for filing a claim is January 18, 2013, and the cash payments are expected to be sent out mid-2013.

Coakley also obtained $44.5 million in funds for Massachusetts as part of the national settlement. A significant portion of these funds is being used to support the Attorney General's HomeCorps program, a first-in-the nation foreclosure prevention and borrower support initiative. The goal of HomeCorps is to mitigate future impacts of the foreclosure crisis by providing advocacy to distressed borrowers in Massachusetts facing foreclosure and includes a comprehensive three-part borrower support and referral initiative. 

 

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