Tuesday, September 23, 2008

Mass AG: Mortgage Industry Has Failed To Live Up To Their Promises Of Avoiding Foreclosures By Achieving Loan Modifications

In Boston, Massachusetts, the state Attorney General's office announced last week:

  • [Last week], Massachusetts Attorney General Martha Coakley submitted testimony to the U.S. House Financial Services Committee regarding her office’s findings and observations with regard to the lack of progress in securing mortgage loan modifications for homeowners who are struggling to make payments and facing foreclosure.


  • Based upon our experiences here in Massachusetts, lenders, holders and servicers have not lived up to their very public promises of avoiding foreclosures by achieving loan modifications,” said Attorney General Coakley. “We appreciate Congressman Frank’s and his Committee’s diligent attention to this issue and hope that they will hold the industry’s feet to the fire at today’s hearing. We have been very active at the state level in urging the mortgage industry to take meaningful action to decrease the number of foreclosures, but we need Congress’ continued help in effectuating real change.”


  • In recent months, the Attorney General’s Office has reviewed 144 loan modification documents, reflecting all loan modifications filed in 14 counties. The office found that: (1) Not one of the 144 loan modifications reduced the principal mortgage balance of Massachusetts; and (2) Virtually none of the 144 loan modifications reduced the monthly payments for Massachusetts homeowners, so the distressed loans are no more affordable after “modification” than before.

For more, see AG Martha Coakley Reports to Congress on Mortgage Industry’s Lack of Action on Loan Modifications.

For AG Coakley's prepared testimony to the U.S. House Financial Services Committee, see Lenders and Servicers’ Promises of Loan Modifcations in Massachusetts are Not Matched by Meaningful Actions That Promote Sustainable Loans.