Last week, Massachusetts Attorney General, Martha Coakley announced one of the first programs in the nation aimed at helping struggling homeowners using proceeds from the landmark settlement with five of the nation's largest lenders. The program, called HomeCorps, hopes to prevent foreclosures by offering counseling services and grants totaling $16 million to Massachusetts homeowners. Another $10 million in grants will be used to aid individuals and neighborhoods that have been harmed by the foreclosure crisis.
Property values have fallen sharply, the Attorney General said, and many residents and communities are still suffering from the housing crisis. Many neighborhoods remain blighted by the spread of decaying and abandoned properties and in February alone, more than 1,300 homes went into foreclosure in Massachusetts, indicating that the mortgage crisis is still a serious problem.
As reported in an earlier post, attorneys general, including Massachusetts' Martha Coakley, reached a deal worth $25 billion with JP Morgan Chase, Wells Fargo, Citigroup, Bank of America and Ally Financial over their roles in the foreclosure crisis. Part of this deal included $44.5 million in direct funding to help distressed Massachusetts homeowners. It also included $14.6 million to be paid to residential mortgage holders in the state.
This agreement also specifies mortgage relief to flow into the state to the tune of $257 million from the five financial institutions. Details explaining how the $257 million will be accounted for have yet to be released; however, the write-downs of loan principles has been mentioned.
The heartbreak of families and individuals losing their homes along with the destruction of communities has been in large part unnecessary, said Ms. Coakley. In addition to assisting qualified homeowners, some of the funds will be used to hire staff, including a program director and a team of specialists in loan modifications, as well as attorneys and nonprofit organizations across the state assisting borrowers facing issues with foreclosure.
In fact, $10 million will be offered in grants for those who come up with ideas and strategies to help fund statewide initiatives for foreclosure prevention. And communities can apply for grants for programs designed to rehabilitate neighborhoods blighted by the foreclosure crisis.
Source: The Boston Globe "AG Coakley says HomeCorps program will help repair damaged caused by the foreclosure crisis," Megan Woolhouse, April 25, 2012