Patrick orders bank division to delay contested foreclosures

Banner Staff

Responding to the state’s foreclosure crisis, Gov. Deval Patrick on Monday directed Commissioner of Banks Steven L. Antonakes to seek delays of up to two months from mortgage lenders, on a case-by-case basis, for Massachusetts homeowners who have filed a complaint with the Division of Banks.

“This action will provide relief to the people who need it the most — the individuals and families who find themselves in the late stages of a personal financial crisis,” Patrick said in a statement. “All we seek is for individuals and families to have a little time to work with lenders and nonprofits toward a solution that might just save their homes.”

Attorney General Martha Coakley said her office is continuing its work to combat predatory lending practices, and pledged to work with the Patrick administration and the state Legislature “to try to provide relief to individuals and families who face the daunting threat of foreclosure.”

Patrick’s office also announced Monday that the Division of Banks has been instructed to review complaints and refer homeowners to reputable homeownership counseling firms, and that the governor has called on lenders to use the delays as an opportunity “to work in good faith” with homeowners struggling to make their mortgage payments.

Antonakes said the Division of Banks is “fully prepared to work with” struggling homeowners, but emphasized the importance of homeowners taking the first step to build that working relationship.

“It is critically important that folks reach out to us at the first signs of trouble so that we can provide them with as much direction and assistance as possible,” said Antonakes.

While solutions may not be possible in all circumstances, Patrick is asking that mortgage lenders consider modifying the terms of their loans to assist borrowers to restructure from adjustable rate mortgages (ARMs) into fixed rate loans, which would keep payments at a steady, predetermined level and protect borrowers from so-called “payment shock” experienced when interest rates increase under the terms of the ARM.

As part of its continuing response, the Patrick administration has identified and contacted housing agencies from across the state to assist distressed homeowners, and made a list of the agencies available on the Web site of the state’s Department of Housing and Community Development (DHCD) at www.mass.gov/dhcd/.

“The administration’s action plan to help homeowners facing foreclosure includes comprehensive services available through numerous nonprofit housing agencies located throughout the Commonwealth,” according to DHCD undersecretary Tina Brooks, who said the state’s nine regional Housing Consumer Education Centers are equipped to help counsel first-time homebuyers on issues like foreclosures, down payments and closing costs.

The Division of Banks has extended the hours of its mortgage hotline — 1-800-495-BANK (2265) — from 7:30 a.m. to 6 p.m. Homeowners can also file a consumer complaint form at www.mass.gov/consumer.