Governor Deval Patrick joined state and local officials, non-profit leaders, mortgage lenders and city homeowners, to unveil his comprehensive foreclosure prevention plan designed to keep people in their homes and to stabilize neighborhoods across the Commonwealth.

The five-point plan consists of targeted neighborhood stabilization pilot programs in Lawrence and five other Bay State cities, transition resources from lenders and servicers, consumer outreach and education, lending best practices and coordination to increase utilization of MassHousing’s loan refinancing program.

“A surge in foreclosures is taking a real toll on families, entire neighborhoods and local economies here in Lawrence and across the Commonwealth,” said Governor Patrick.  “Our prevention plan is comprehensive and gives distressed homeowners and communities the immediate and long-term relief they need right now.”

Transitional Foreclosure Resources

To assist these crucial efforts, the administration’s prevention plan calls on participating lenders to provide $5,000 to the housing counseling agency working with an eligible homeowner who loses his or her home to foreclosure or gives a deed in lieu of foreclosure.  The transition resources will enable the homeowner to pay for first and last month’s rent and moving expenses.  The remaining money will be retained by the non-profit organization to offset the administrative cost of its counseling programs. Transition resources will be limited to borrowers who are working with a qualified housing counselor approved or sponsored by NeighborWorks, CHAPA or HUD and who have an ARM first mortgage on an owner-occupied one through four-family home and meet other criteria.

The “Mortgage Relief” Initiative

The Mortgage Relief initiative has grown from five regional banks to nearly fifty banks of every size, with branches throughout much of New England. The participating banks represent a safe and sound place to discuss foreclosure prevention, with expertise and respect. Whenever possible, the banks participating in the initiative will help eligible homeowners refinance into conventional loans that will better meet their needs.

The banks aim to help homeowners with high-rate, nontraditional, or resetting loans who are having difficulty making payments (or expect to).

Banks that serve the region, regardless of their size, have a stake in the success of the New England economy. The banks participating in the Mortgage Relief Initiative:

• have committed to reach out to borrowers in high-rate mortgages with difficult terms;
• are expanding their utilization of programs that may help borrowers with limited home equity (programs like Federal Housing Authority loans, and loans guaranteed by state agencies);
• have designated one or more “go to” lenders who can help borrowers explore their mortgage relief options;

Borrowers in those difficult situations should work to contact the servicer of their mortgage as soon as possible (in particular, the servicer’s loss mitigation department), or a mortgage-counseling service.

Home Saver Foreclosure Prevention Program

Are you worried about keeping up with your monthly mortgage payments? Were you surprised by the terms of your loan after you closed your mortgage? MassHousing’s Home Saver program may be able to help you avoid losing your home through foreclosure.

Home Saver is privately financed; no taxpayer dollars are used for the program.

Home Saver is a counseling and loan program that helps borrowers who are unable to repay their mortgage. It is a proactive step that home owners take before their mortgage becomes unaffordable, and before foreclosure becomes a real possibility. Home Saver includes a mandatory counseling component and a refinancing of your existing loan.

Home Saver assists home owners with modest incomes who are burdened by an unaffordable loan. Given the loan’s terms and the borrower’s income, assets, obligations and other considerations, there could have been no reasonable expectation that the loan could be repaid.

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