The Federal Reserve Bank of Boston and the Massachusetts Bankers Association (MBA) have expanded and modified their Mortgage Relief initiative introduced in December 2007. The campaign has grown from an initial five banks to more than 50 banks of every size, with branches throughout Massachusetts and much of New England, the groups report.
The original Mortgage Relief plan was to reach out to borrowers with high-rate subprime loans who might be eligible for a more secure, predictable, affordable mortgage from a bank. However, falling home prices in many parts of New England have eroded home equity. As a result, some borrowers' homes are now worth less than their loans, and refinancing into a new mortgage can be difficult.
When they cannot assist with a loan, the Mortgage Relief banks state that they urge borrowers in difficult situations to contact the servicer of their mortgage as soon as possible (in particular, the servicer's loss mitigation department), or a mortgage-counseling service such as the Homeownership Preservation Foundation or regional foreclosure-prevention centers identified by states.
‘Banks have always quietly worked with borrowers in distress,’ says Kevin Kiley, the MBA's executive vice president and chief operating officer. ‘However, despite the present challenges, more banks want to stand up and be counted as part of the solution.’
Source: Federal Reserve Bank of Boston