STEPHEN L. ANTONAKES
Homeowners should ‘reach out’
In an action hailed as “unprecedented,” the state Division of Banks last Monday began asking lenders of home loans in default to stop foreclosure auctions for homeowners who file a complaint with the agency.
Gov. Deval Patrick requested the remedy as an emergency measure to stem Massachusetts’ foreclosure crisis. He also has asked that lenders, during the 60-day hold-off period the DOB is requesting, work “in good faith” with homeowners struggling to make mortgage payments.
Patrick requested that when possible, lenders assist borrowers in moving from adjustable-rate mortgages into fixed-rate loans.
“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,” the governor said in a prepared statement.
Massachusetts Mortgage Bankers Association Executive Director Kevin Cuff said lenders and the DOB will then have to ascertain whether the consumer’s request is appropriate and whether a new loan agreement can be worked out.
“There will be some instances in which there’s a foreclosure, and that’s just what it is,” he predicted.
Cuff said reports that Patrick’s request for temporary stays are in effect a 60-day “moratorium” on foreclosures are erroneous.
“Our members have called us to say their investors are concerned with that word, and with what the governor has the right or authority to do,” he said. “But I want to be clear that ‘moratorium’ is a word that [housing activist] Bruce Marks is using because it’s expedient. The reality is that this is a request.”
Patrick’s directive to the DOB follows an April 26 encounter with a group of homeowners in danger of foreclosure. Led by Marks, director of the Boston-based Neighborhood Assistance Corporation of America (NACA), an initial group of more than 50 held a press conference at the State House that afternoon to demand help from the governor.
“The main message was that these homeowners are the wave before the tsunami comes in and that this tsunami is going to wipe out thousands of Massachusetts homeowners and destroy our communities,” said Marks.
Within days of that event, about 25 homeowners facing foreclosure auctions met with the governor.
Marks said Patrick “has taken unprecedented, huge strides” toward addressing Massachusetts’ foreclosure problem.
‘Hard-Working People’
DOB Chief Operating Officer David Cotney said Patrick’s office, his agency and consumers all want the same thing – to help stem the tide of foreclosures.
But he would not draw a cause-and-effect relationship between Marks’ efforts and Monday’s announcement.
“We were working on these issues before, and we’ll continue to,” he said.
DOB staff members were at the governor’s office April 26 to greet the NACA group, he said, because Marks announced the planned visit on New England Cable News the night before.
Cotney said a foreclosing home loan doesn’t have to have any specific characteristics to qualify for a DOB “triage” response.
“Anybody who contacts us with a written complaint, we will see what stage they’re in, and if it’s in a late stage we’ll ask the lender to stop the auction and get the consumer into counseling,” he said.
Homeowners can call the Division of Banks’ ongoing mortgage hotline at (800) 495-BANK (2265) or file a complaint at www.mass.gov/consumer.
The hotline’s newly extended hours are from 7:30 a.m. to 6 p.m. on weekdays.
Cotney said his office has not yet been inundated with complaints, but will dedicate the necessary staff resources to helping those who file one.
DOB Commissioner Steven L. Antonakes told a local television news program on May 1 that 43 people had filed complaints. In a prepared statement, he said his agency, which is a division of the state Office of Consumer Affairs and Business Regulation, is “fully prepared to work with homeowners who are struggling with their mortgage payments and risk losing their homes.
“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,” he said.
According to a report of his State House visit, Marks referenced a telephone call that Patrick made on behalf of Ameriquest Mortgage Co. in March, when the company needed financial assistance from Citi, the Manhattan, N.Y.-based holding company for Citibank, in explaining why he thought Patrick should make calls on homeowners’ behalves.
Patrick was a paid board member of ACC Capital Holdings Corp., Ameriquest’s parent company, from 2005-2006. ACC Capital Holdings, the nation’s largest subprime lender, has been accused of deceptive sales and predatory lending practices.
Marks did not confirm that he referenced Patrick’s phone call, but said such remarks “weren’t necessary” in the face of Patrick’s evident sympathy for the homeowners.
“What he’s saying is any time you take any complaint to the banking commissioner, he is going to call the lender and stop the auction,” Marks said.
“When the governor or the attorney general tells a lender to stop an auction, I can’t imagine any lender saying ‘drop dead,'” he added.
Massachusetts Attorney General Martha Coakley has pledged that her office will work with Patrick, the DOB and the state Legislature – where several bills proposing remedies to the state’s foreclosure crisis are pending – to provide relief to those facing foreclosure.
Marks said most of those who accompanied him to Patrick’s office two weeks ago were homeowners with subprime loans who faced foreclosures within days. He said some, but not all, were NACA members.
“These were hard-working people who had tried absolutely to work things out with their lenders, to do everything possible to save their homes,” he said.
The homeowners came from Cape Cod, as well as Springfield, Fall River, Lawrence and other communities, he said. They have loans with Ameriquest, Option One Mortgage, Countrywide Home Loans, Wells Fargo Home Mortgage and HSBC, among others.
DOB employees made phone calls on behalf of 17 of the homeowners who filed written complaints with the division April 27. Marks said all 17 have been given a time extension with their lenders while they attempt to work out new agreements.
A Patrick spokesman said on April 27 that 10 lenders had agreed to give extensions, five had not yet called back, one was unknown and one loan involved a property in New Hampshire.
