Massachusetts Foreclosure Prevention Efforts
For 2009, Massachusetts ranked 22nd among all states in foreclosure rate, a drop of 18.54% from the year before. Nationally, 2009 was the worse year for foreclosures in US history, with 2.8 million property owners receiving a foreclosure notice.
The commonwealth’s home values have depreciated less than in other states and employment has held steadier than the national average, factors contributing to the declining foreclosure rate. Massachusetts foreclosure prevention initiatives have helped as well. The commonwealth’s foreclosure rate is 20th among the states.
The state’s anti-foreclosure efforts date back to a summit called in November 2006 by the Massachusetts Division of Banks when the scope of the crisis first showed itself. Since then the commonwealth has engaged in a concerted effort to stiffen mortgage industry standards, increase its regulation, and strengthen the partnership between state and municipal agencies to forestall foreclosures.
If you’re facing an adjustable rate mortgage (ARM) reset and anticipate not being able to make your payments, Massachusetts urges that you first call the toll free foreclosure hotline 1-888-995-HOPE (4673). The assistance there is provided by the Home Ownership Preservation Foundation and NeighborWorks America. If you prefer to contact someone in your neighborhood, here is a list of all Massachusetts-approved counseling agencies.
Massachusetts established a homeowner counseling and refinancing program called Home Saver. For qualifying borrowers, mortgages can be refinanced into fixed rate home loans through the Massachusetts Housing Finance Agency, a state entity with more than 35 years of experience in providing home loans for those with moderate incomes. No taxpayer dollars are used for the program.
The state helped pull together a $125 million New England Mortgage Relief Fund established by Bank of America, TD Banknorth, Citizens Bank, Sovereign Bank and Webster Bank. It’s for borrowers who are current on their mortgage payments to refinance into more affordable fixed rate home loans. If your home loan is through one of these banks, contact its loss mitigation department.
The state Attorney General’s Office, with the assistance of local bar associations, opened a Pro Bono Foreclosure Assistance Hotline for low-income Massachusetts residents facing foreclosure. Contact them at 800-342-5297 or 617-603-1700.
Through executive order Governor Patrick ordered the Massachusetts Division of Banks to forestall foreclosures for Massachusetts homeowners who have filed a complaint. Forms are available here. If the foreclosure is scheduled within the next week, the DOB urges you to call the hot line toll free at 1-800-495-BANK (2265). It is manned Monday through Friday from 8:45 AM to 5 PM Eastern time.
The state also created some of the strictest regulatory structures for mortgage lenders and brokers in the nation. Key reforms include:
- Prohibiting the signing of incomplete or blank loans applications.
- Outlawing any income misstatement on a loan application.
- Putting an end to any misrepresentation or omission on behalf of the loan originator regarding the terms of a mortgage.
- Requiring the licensing of mortgage brokers, with a minimum of three years experience and five years for lenders. In the year since the law took effect on July 1, 2008, of the 7,700 applications received, less than 6,000 were approved. Massachusetts is now a participant in the state supervision represented by the Nationwide Mortgage Licensing System.
- Mandating that in mortgage advertising, the type and license number must now be disclosed.
The net worth and bonding requirements for lenders and brokers were also increased.
If you are unable to reach your servicer or local state program, or if you would like additional assistance in this process contact Mortgage Outreach at 1-866-408-0420. Mortgage Outreach works directly with many servicers to help find solutions for borrowers that are struggling to keep up with their payments.
