AG Coakley Reminds Homeowners Eligible for Loan Modifications Under New Law to Seek Assistance Through HomeCorps
Thousands of Borrowers with Certain High Risk Loans Receive “35B” Notices About Options to Prevent Foreclosure and Apply for Loan Modifications; Qualified Homeowners Must Respond Within 30 Days
BOSTON – April 26, 2013 – (RealEstateRama) — Thousands of Massachusetts residents at risk of foreclosure are receiving notices in the mail alerting them to their eligibility to request a loan modification, Attorney General Martha Coakley announced today. Homeowners with questions can seek immediate assistance through the AG’s HomeCorps program, which is celebrating its one-year anniversary today.
The new loan modification statute, signed into law on Aug. 3, 2012, requires creditors holding certain mortgage loans at risk of foreclosure to notify borrowers of their rights to pursue a loan modification or other foreclosure alternatives. Close to 10,000 borrowers have already been sent notices about the opportunity, and many are seeking guidance from the HomeCorps Program to submit the necessary documents within the required 30-day period. Thousands more are expected to be provided with a loan modification opportunity as the notification process continues.
“It is extremely important for all eligible borrowers to respond to this notice and take full advantage of any opportunity to prevent foreclosure,” AG Coakley said. “State law now sets standards to ensure creditors promote reasonable loan modifications, and our HomeCorps program is here to help homeowners through that process.”
Under Massachusetts law, borrowers with loans that meet a certain criteria have the right to apply for a loan modification if they submit a complete financial package to the bank within 30 days of the notice. Under the new Section 35B of G.L. Chapter 244, the servicer is required to take “reasonable steps” and make a good faith effort to avoid foreclosure, including an assessment of the borrower’s ability to make an affordable monthly payment.
The entire modification review should occur in less than 150 days. Specifically under this process, if a homeowner is offered a modification, they have the right to make a reasonable counteroffer within 30 days of receiving it. Failure to respond to the notice in any way may result in an earlier acceleration of the loan leading to faster foreclosure.
Today also marks the one-year anniversary of AG Coakley’s first-in-the-nation HomeCorps program that has already directly assisted more than 6,000 borrowers in Massachusetts, more than 1,400 of whom have now received permanent loan modifications. The HomeCorps program is funded by the $25 billion national settlement with the five major lenders over their servicing and foreclosure practices.
Since the program launched last April 25, HomeCorps has expanded a series of initiatives to help homeowners directly. These include a Borrower Representation Initiative to assist homeowners with legal issues that must first be resolved prior to a loan modification or other relief. Also, the Borrower Recovery Initiative seeks to prevent homelessness and help borrowers stabilize and recover after the loss of home ownership due to foreclosure or after eviction that follows a foreclosure. HomeCorps also announced the opening of two satellite offices in Brockton and Lowell, offering direct, community-based assistance to communities heavily impacted by the foreclosure crisis.
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