As part of the $25 billion settlement deal made with five of the largest mortgage lenders, as previously reported in this blog, thus far nearly 4,000 Massachusetts homeowners have each received an average $67,450 in mortgage refinancing assistance. Nationally, almost 280,000 borrowers have received an average of $780,730 each in assistance. The $266 million received by Massachusetts borrowers is only a small part of the $21.92 billion national settlement disbursed thus far by the lenders.
Since some of the financial aid offered by lenders does not fall under the settlement figures it is too early to tell where the banks are at with hitting the $25 billion settlement figure. Although the numbers reported look very promising, the monitor of the national mortgage settlement stated he still must go over the numbers to confirm the data is accurate.
The assistant the settlement has brought Massachusetts homeowners includes about $123 million in reductions to principal balances received by 2,001 owners between March and the end of September. An additional 1,115 borrowers were assisted with $108 million in aid for short selling their homes. This is where a lender agrees to sell a home for less than the current mortgage amount.
The relief has been sorely needed due to a 3.5 percent rise in foreclosures in the state from January to September compared to the same period last year. The mortgage crisis is far from over however as more and more homeowners struggle with foreclosure and mortgage principle reductions.
According to the director of the Boston-area non-profit, Massachusetts Communities Action Network, the report actually indicates a small number of US homeowners are benefitting from the settlement. He warned that unless mortgage giants Freddie Mac and Fannie Mae agree to principle reductions the mortgage crisis is likely to continue.
If you need assistance with your lender or just want to know what your options are to participate in the current government programs, including the settlement, contact a real estate professional who can help you. An attorney with experience in real estate litigation refinancing, short sales as well as the foreclosure process can help you understand your options, including whether filing for bankruptcy protection is possible in order to get out from an underwater mortgage, if that is your goal.
Source: The Boston Globe, "Mass. borrowers get $266m in aid," Jennifer B. McKim, Nov. 19, 2012