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.
Real estate transactions are often fraught with potential pitfalls, especially in today's volatile environment. The number of foreclosures on both commercial and residential real estate has proven a major problem for homeowners and investors alike. Those facing foreclosure on their property should seek to understand their rights and available options for dealing with banks and lenders.
While some people may know that a foreclosure notice is coming, others can be blindsided by changes in their real estate loans that happen as a result of changes at their respective financial institutions. The financial crisis in the last few years has resulted in a number of mergers and acquisitions at various financial institutions further complicating the foreclosure process in the U.S.
Foreclosure is typically a very difficult time for homeowners in Massachusetts and elsewhere, as they may lose their home in the proceedings. However, the story of a couple from Brockton shows how real estate owners may be able to obtain a loan modification that will allow them to keep their property.
Traditionally, foreclosure is a nightmare for Massachusetts residents. Because the home is regarded as collateral in a mortgage, banks could seize the home, effectively kicking out the homeowner. However, a new state law goes into effect in the state in November that helps to protect some residents from losing their homes. As long as the homeowner can continue to pay at least some monthly mortgage amount, the banks now have incentive to consider a loan modification rather than proceed directly with a foreclosure action.
A letter from Massachusetts Attorney General Martha Coakley was sent to the two government-controlled mortgage giants Freddie Mac and Fannie Mae instructing them of a new Massachusetts law that requires them to offer loan modifications that are "commercially reasonable." The letter was sent to the regulator of the two finance companies in hopes of raising the stakes in their dispute over whether helping struggling homeowners cut mortgage debt is beneficial. The letter informs the director of the Federal Housing Finance Agency, Ed DeMarco that Freddie and Fannie, along with other creditors are to take commercially viable steps to help homeowners avoid foreclosure on certain mortgages. The agency is currently reviewing the letter and will respond to it at some point, according to an agency spokesperson. Ms. Coakley said the new law promotes the concept that reducing the mortgage debt and providing loan modifications for some homeowners is a useful tool in preventing unnecessary foreclosures.
In today's challenging residential real estate markets in Massachusetts and around the country, many people considering a divorce may not know where to turn when it comes to dealing with their residential property during or after a divorce. Questions arise as to what the divorce will do to your individual credit scores and how you should handle the mortgage if one spouse wants to keep the house, but cannot qualify for the mortgage on his or her own.
As many Worcester families already know, the foreclosure crisis has hit our area particularly hard. Now a national group called the Neighborhoods Assistance Corporation of America is trying to bring a little relief to the Worcester area by working with local residents to pair them with banks to find a solution to their mortgage issues. Having face to face contact with a lender can make all the difference, said the director of communications for NACA. Having the decision maker right there in front of the homeowner really opens up the communications and makes the lender see the person behind the numbers in the file.
Massachusetts condominium owners seeking to refinance their mortgage have been in a rather tough spot in the real estate market for the past several years. Although the federal program known as the Home Affordable Refinance Program has been in existence for a few years now, many condominium owners were prevented from refinancing due to the programs restrictions on condominiums. The federal guidelines were difficult to meet however, with HARP 2.0, as some real estate experts are calling it many of the restrictions for condo owners have been removed.
The real estate tracking firm the Warren Group is at it again, reporting that total Massachusetts mortgage activity has increased more than 28 percent for this year compared to the same period last year. Although home sales have added to the increase, the real news in the increased numbers is the refinance mortgage activity, according to the group's CEO, Timothy Warren.