Despite signs of improvement, the rate of foreclosures is still an issue in Massachusetts. A reasonable percentage of homeowners in the state are still facing mortgage issues like loans that are worth more than the actual homes. This puts those homes at risk of foreclosure.
On Feb. 21, a report was published that said that a multistate settlement with U.S. banks has provided about $510 million in mortgage help for borrowers in Massachusetts. A total of 7,350 borrowers from the state received $69,456 each, on average, in mortgage assistance last year. However, the state's homeowners received less than the national average because housing prices fell less in the state than elsewhere in the country.
Nationwide, the amount of relief totaled in excess of $42.3 billion for 529,275 borrowers: roughly $80,000 per borrower. The help has been doled out in different ways, with some relief coming in the form of principal forgiveness, short sales and refinancing. This comes a year after a $25 billion dollar deal between the government and the nation's top lenders over allegations of robo-signing.
Some of the lenders involved include Bank of America Corp., Citibank, Wells Fargo & Co., JPMorgan Chase & Co. and Ally Financial Inc. Ally Financial fulfilled its role by putting up $257 million to homeowners, according to the settlement's monitor. Homeowners in Massachusetts saw more than $17 million of this funding.
This new report shows that the mortgage crisis in the state seems to be lessening, with seizures by banks falling by 13 percent, compared to 2011. However, close to 17 percent of Boston's borrowers still have mortgages that exceed their homes' values. One expert has noted that this should act to bring home values closer in line with realistic prices.
There are several ways to avoid foreclosure. A homeowner can refinance or try to obtain better financial terms by modifying the debt. However it's done, it's important for borrowers to protect their own interests by seeking information and advice.
Source: Boston Globe, "7,350 troubled homeowners in Massachusetts receive financial help through national mortgage settlement, report says," Jenifer B. McKim, Feb. 21, 2013