Below is an excerpt from an article published on MassLive.
Jessica Garcia, vice president of national mortgage outreach for Bank of America, travels the country to oversee loan modification. With all the national foreclosure settlement money pouring into the state from the country’s biggest lenders, delinquent mortgages here should be getting modified in great volumes.
But the five banks on the hook for the settlement’s $318 million for foreclosure relief in Massachusetts have modified relatively few overdue loans.
The lenders could choose principal forgiveness, principal reductions, interest rate reductions or various other arrangements that allow borrowers to stay in their homes.
But the lenders primarily have taken advantage of a provision in the settlement, reached in February between the five lenders and state attorneys general, that allows them to count short sales toward their modification requirement. The five lenders used short sales – the unloading of a home for less than the value of its mortgage – to account for 70 percent of the $103 million allocated for nearly 1,400 Massachusetts borrowers in the April-August period.
All national banks, including those not in the settlement, only began modifications on fewer than 5 percent of delinquent home loans in the state during the second quarter, according to the U.S. Office of the Comptroller of the Currency. Most of the nearly 60,000 delinquent mortgages in the state as of June 30 were held by large national banks, including nearly 40,000 at Bank of America and more than 8,000 at JPMorgan Chase. However, national banks implemented a total of only 1,563 modifications in the state during those three months, according to OCC data.