Jim Kinney, The Republican
The state’s housing market, and its economy in general, won’t fully recover until Massachusetts puts the mortgage foreclosure crisis in the rear view mirror, state Attorney General Martha Coakley said Tuesday at the annual meeting of the Affiliated Chambers of Commerce of Greater Springfield.
“We are going to do everything we can to stop every preventable foreclosure,” Coakley said. “There are some foreclosures that have to happen and we recognize that. But we want to stop the preventable ones.”
The difference between a preventable foreclosure and one that is sadly inevitable, Coakley said, is that preventable foreclosures involve homeowners who could make payments at a lower rate. But instead of giving the homeowner a new rate, large out-of-state mortgage lenders foreclose, leave the home empty for a time and end up selling it for much less than the lender would have collected from the original homeowner – even at the lower rate.
In February, Coakley was one of 49 attorneys general who secured a $25 billion settlement from five banks accused of “robo-signing” fraudulent documents. Massachusetts share of that that settlement is $317.9 million.
That money includes $45 million to the state to assist homeowners. Some will be granted to local organizations that run home ownership programs. Coakley said she is also adding to her foreclosure-prevention staff. She’s recently hired two people for her Springfield office and plans to add a third.
Also, there will be grant money available to community groups that focus on home-ownership and foreclosure prevention.