A recently released federal report says distressed homeowners in the United States were more likely to stay in their residences after their mortgages were modified. In fact, the Office of the Comptroller of the Currency found nearly three-fourths of homeowners who received a loan modification in 2011 are currently in good standing on their new mortgage. In 2009, only 37 percent of distressed borrowers held onto their homes after a loan adjustment. According to the study, lenders were increasingly willing to reduce the monthly payments for borrowers who were behind on their loans in 2011. This reportedly played a significant role in the higher success rate for mortgage modifications made last year.
The Attorney General of Massachusetts, Martha Coakley, believes the study demonstrates why the Commonwealth of Massachusetts should impose a loan modification requirement on mortgage lenders who attempt to foreclose on residences in the state. Coakley believes loan modifications are good for both borrowers and lenders. She has sponsored Massachusetts legislation that would require mortgage lenders to offer alternatives to homeowners if it would be more profitable for the lender than foreclosing. The requirement would also extend to borrowers with risky subprime loans.
House Bill 1219 is now pending in the Joint Committee on Financial Services. Coakley stated the proposed legislation would halt unnecessary foreclosures in the state and provide a boost to the nation’s faltering economy. According to the Massachusetts Bankers Association, lender requirements included in the bill are too broad. The organization’s Executive Vice President, Kevin Kiley, stated the Bankers Association has strong objections to the bill as it is written. The proposed legislation would purportedly financially punish lenders if they did not achieve a positive outcome.
The Attorney General’s Office is poised to receive approximately $45 million from a group of major mortgage lenders as part of a multi-state fraud settlement. Last week, the office put out a request for applications from Massachusetts nonprofits to run two programs for troubled homeowners and borrowers who lost their homes to foreclosure. The programs are part of Coakley’s HomeCorps initiative. The programs will each receive a $3.5 million grant from the Attorney General’s Office. According to Coakley, the grants are only the first step in a much larger program her office will implement to help struggling Massachusetts homeowners.
Buying a new home can be an exciting time, but there is a lot to think about when entering into a residential real estate transaction. Each property purchase is unique and there is a lot at stake both financially and emotionally for everyone involved. If you decide to purchase a short sale or foreclosure, there are many additional factors to consider. It is always a good idea to speak with an experiencedMassachusetts residential real estate attorney early on in the buying process in order to protect your family’s financial interests. By hiring a property lawyer, you may be able to avoid costly mistakes.
Contact the attorneys at Pulgini & Norton, LLP today if you are considering purchasing a home in Massachusetts. Our experienced New Bedford residential real estate lawyers can help you negotiate with lenders, examine the title, and handle any unforeseen issues which may arise during your real property transaction. Our law firm represents clients throughout the Commonwealth of Massachusetts including Bristol, Suffolk, Norfolk, Middlesex, and Worcester Counties. To speak with a hardworking real estate attorney, call Pulgini & Norton at (888) 344-2046 or contact us through our website.
More Blogs:
Office Space on Boston’s Waterfront is in High Demand, Massachusetts Real Estate Lawyer Blog, April 13, 2012
Pending Home Sales See Increase in Boston Metro, Massachusetts Real Estate Lawyer Blog, April 3, 2012
Additional Resources:
Coakley pushes for law offering mortgage aid, by Jenifer B. McKim, Boston Globe