AG Statement on New Regulations Prohibiting Foreclosures During Loan Modification Process
BOSTON – Attorney General Martha Coakley issued the following statement in response to new regulations filed by the state’s Division of Banks that prevent lenders from foreclosing on a property if an application for a loan modification is in process.
“These regulations are another important step in helping prevent unnecessary foreclosures. We are now seeing the real benefit of this new law that promotes reasonable loan modifications, keeping people in their homes and properties on the tax rolls, all without requiring banks to sacrifice the bottom line.”
Since taking office in January 2007, combating the foreclosure crisis has remained a priority of AG Coakley’s administration by seeking accountability through litigation, regulation and other advocacy.
In August 2012, Governor Deval Patrick signed “An Act Preventing Unlawful and Unnecessary Foreclosures,” a law sponsored by AG Coakley along with co-sponsors Senator Karen Spilka (D-Ashland), and Representative Steven M. Walsh (D-Lynn). The bill was enacted through the Joint Committee on Financial Services under the leadership of Committee chairmen Senator Anthony Petruccelli and Representative Michael Costello.
The new law is designed to prevent unnecessary foreclosures by mandating loan modifications when they make economic sense, and demonstrates again the Commonwealth's commitment to protecting homeowners and stabilizing the housing market. The new regulations, established as a result of the loan modification statute, will require mortgage servicers to explore more options to avoid foreclosure, and prohibit third-party mortgage servicers from initiating a foreclosure when a loan modification application is in process.
In February 2012, AG Coakley announced that a $25 billion nationwide state-federal settlement involving the nation’s five largest mortgage servicers would bring an estimated $318 million in assistance to Massachusetts borrowers. In April 2012, AG Coakley launched HomeCorps, a groundbreaking initiative to prevent unnecessary foreclosures by increasing the number of loan modification specialists available to help distressed borrowers and providing a wide range of grant opportunities aimed at easing the foreclosure crisis in Massachusetts.
If you are facing foreclosure, or the foreclosure has already occurred, the Attorney General’s HomeCorps may be able to help by offering access to a variety of foreclosure prevention or recovery services. Contact the HomeCorps Hotline at 617-573-5333.
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