Playtime is over for banks dragging their feet to help East Boston residents facing foreclosure to modify their loans.
Attorney General Martha Coakley was at the East Boston Neighborhood Affordable Housing (NOAH) last Friday to brief the agency on her unprecedented lawsuits against five national banks in connection with their roles in allegedly pursuing illegal foreclosures on properties in Massachusetts as well as deceptive loan servicing. The suite is against Bank of America, Wells Fargo, JP Morgan Chase, Citi, and GMAC and also names Mortgage Electronic Registration System, Inc. (“MERS”) and its parent, MERSCORP Inc., as defendants.
For its part, NOAH has worked for the past three years to help Eastie families stay in their homes through loan modification efforts that have been stifled by some banks.
“The single most important thing we can do to return to a healthy economy is to address this foreclosure crisis,” said Coakley. “Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law. Our action today seeks real accountability for the banks illegal behavior and real relief for homeowners.”
In Eastie alone, only 85 families have been helped with loan modifications to avoid foreclosure but there are a staggering 562 more families that have been waiting years for help from banks that have allegedly put these homeowners in risky loans or made the process of loan modification to difficult.
“I’m concerned about places like East Boston because many homes that have been foreclosed could have been saved,” said Coakley at the NOAH press conference. “I’m tired of excuses and banks are telling us that in a lot of situation they did all they can to help homeowners avoid foreclosure.”
However, Coakley said her office has heard hundreds of horror stories from Eastie residents and residents across the state of banks loosing loan modification paperwork or making the process too difficult and confusing.
“People are giving up because they get frustrated by the process,” said Coakley. “So we want to get results for the people of East Boston and the state because these banks have misrepresented what they are doing to help stem foreclosures here and we want answers.”
Coakley’s complaint alleges the banks deceived and misrepresented to borrowers the process, requirements, and availability of loan modifications. She said the banks publicly claimed to be engaged in widespread loan modifications aimed at preserving home ownership and avoiding unnecessary foreclosures. Through the National Homeownership Retention Program, which commenced on November 6, 2008, these banks represented that they would work with borrowers to help them avoid unnecessary foreclosures by reducing monthly mortgage payments to affordable and sustainable levels.
The complaint alleges these banks misled borrowers about their eligibility for this program and the amount of relief available, failed to achieve a significant level of modifications, and often strung along borrowers for months in trial modifications that were ultimately rejected.
“We thank the Attorney General for making this critical announcement that is designed to help homeowners legally and responsibly stay in their homes,” said NOAH Executive Director Phil Giffee. “This is not a handout but economic fairness for these families and out community. Documents are forever getting lost, calls are not returned and new servicers are assigned again and again. It’s shameful for hard-working Americans to be treated this way.”
Attorney General Martha Coakley with East Boston Neighborhood Affordable Housing (NOAH) Executive Director Phil Giffee last Friday. A.G. Coakley was on hand at NOAH to talk about her unprecedented lawsuits against five national banks in connection with their roles in allegedly pursuing illegal foreclosures on properties in Massachusetts as well as deceptive loan servicing.
NOAH Executive Director Phil Giffee introduces Attorney General Martha Coakley.
Attorney General Martha Coakley talks about some of the banks unfair loan modification practices.
Attorney General Martha Coakley meets the staff at NOAH that has been working for three years to help East Boston families stay in their homes.