You can always attempt to negotiate a loan modification or short-sale on your own.
Banks (or “servicers”) may be willing to discuss modifying your mortgage loan to an affordable rate (based on your ability to pay, etc.) in order to avoid foreclosure. There are non-profit housing counselors available in most communities at no cost to you if you wish to try and modify your current mortgage loan and are facing foreclosure. These counselors have experience in dealing with lenders and servicers. A list of Massachusetts foreclosure assistance resources by town is available on the Office of Consumer Affairs and Business Regulations website located at www.mass.gov. If you are a New Hampshire resident, you can find foreclosure assistance resources located on New Hampshire’s Foreclosure Prevention Initiative’s website located at www.homehelpnh.org. Mediation services are also available for New Hampshire homeowners through the New Hampshire Office of Mediation and Arbitration:
Unfortunately, these non-profit agencies and organizations cannot help you if you have a need to sell your home and need to settle your mortgage debt by means of a legally negotiated short-sale settlement.
If you are going to hire a non-attorney entity or person and pay them to help represent you in attempting to avoid foreclosure, it is ILLEGAL for them to demand or accept a fee in advance. Fees for legal services can be charged in advance by a licensed attorney for the specific purposes of facilitating a short-sale mortgage settlement, preparing a bankruptcy filing or for court proceedings or legal services performed by a licensed attorney to help a homeowner avoid foreclosure including negotiating a loan modification.You should NEVER agree to any proposal where you are required to transfer title to your home to another party.
Do notignore notices from the lender. And do not follow the advice of anyone who says that you should stop making payments – you will only get further in arrears, closer to foreclosure, and damage your credit rating.
Just because a party has information about your loan terms or your property does not mean that they are affiliated with your bank or a government program. That information can be obtained by various means, including through foreclosure filings. Be particularly careful not to share your personal information or credit information with someone whom you do not know.
Under the law in Massachusetts, the lender must provide you with a default notice and a 150 day “right-to-cure” period before they can foreclose on your home. Use this period to attempt to negotiate a loan modification or other possible solutions with the lender in order to avoid a foreclosure. If a foreclosure appears to be inevitable, speak with your lender about how much time you may have to find a new place to live and consult with a social services agency in your community about assistance with the transition. Homeowners facing foreclosure should know that there are several organizations available to help.
Making Home Affordable (www.makinghomeaffordable.gov) **FEDERAL PROGRAM**
As part of the Obama Administration’s comprehensive Financial Stability Plan, Making Home Affordable is a plan to stabilize the housing market and help up to 7 to 9 million Americans reduce their monthly mortgage payments to more affordable levels. This includes: the Home Affordable Refinance Program, which gives up to 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments; and the Home Affordable Modification Program, which commits $75 billion to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures. MakingHomeAffordable.gov provides homeowners with detailed information about these programs along with self-assessment tools and calculators to empower borrowers with the resources they need to determine whether they might be eligible for a modification or a refinance under the Administration's program. Borrowers can also connect with free counseling resources to help with outstanding questions; locate homeowner events in their communities; find a checklist of key documents and materials to have ready when making that important call to their servicer as well as FAQs from borrowers in similar circumstances.
Division of Banks (www.mass.gov/dob) MASSACHUSETTS ONLY
The Massachusetts Division of Banks seeks to maintain a sound, competitive and accessible financial services environment by ensuring fair, balanced and compliant lending practices throughout Massachusetts.
If you have received a foreclosure notice (and are facing an auction sale date) you are strongly urged to contact the Massachusetts Division of Banks at 617-956-1500 x501 or send a written request to:
Massachusetts Division of Banks
One South Station
Boston, MA 02110
(617) 956-1599 FAX
You may also e-mail your request to email@example.com. You must state that you are a homeowner in foreclosure and are asking for help in seeking a temporary stay of execution (granting a 30-60 day delay in the foreclosure proceedings) in order to reach a mutual workout solution with your mortgage company. Be certain to fully identify yourself. Include your name, address and phone number. You should provide the name and phone number of your mortgage lender and your account number. Be sure to include the date your property is scheduled to be auctioned and the name and phone number of the foreclosure attorney representing your lender.
Massachusetts Attorney General’s Office (www.mass.gov/ago) MASSACHUSETTS ONLY
You may also be able to seek assistance through the Massachusetts Attorney General’s Office by contacting their Foreclosure Assistance Hotline which was developed to help individuals facing foreclosure. The Attorney General’s Office, in partnership with several bar associations, legal services organizations and advocacy groups, announced the establishment of Foreclosure Assistance Hotline for low-income Massachusetts residents who are facing foreclosure. Homeowners are urged to call (800) 342-5297 or (617) 603-1700 and leave a message in the foreclosure assistance mail box for further information.
Ensuring Stability through Action in Our Community (www.esacboston.org) MASSACHUSETTS ONLY
Ensuring Stability through Action in Our Community (ESAC) is a nonprofit organization that provides foreclosure prevention counseling and third-party negotiation with mortgage brokers. ESAC also offers information and referral services to help consumers find alternate housing programs for which they may be eligible. To contact, call their Sustainable Homeownership Center at (617) 524-4820.
Neighborhood Assistance Corporation of America (www.naca.com) **NATIONAL PROGRAM**
The Neighborhood Assistance Corporation of America (NACA) operates a Home Save Program designed to streamline negotiations with the lender through political contacts and trained consultants. Consumers will need to fill out an application at their website and note if they have received an auction date in order to potentially have their foreclosure postponed.
National Consumer Law Center (www.consumerlaw.org) **NATIONAL PROGRAM**
The National Consumer Law Center works to defend the rights of consumers in the areas of consumer debt, bankruptcy, foreclosure and mortgage servicing, basic energy and utility issues, and student loans. It also works to protect vulnerable populations and ensure the provision of these rights. Though it does not represent individual clients in legal matters, the organization’s website has a variety of consumer publications on issues pertaining to foreclosure and mortgage servicing, bankruptcy, as well as a number of other consumer protection concerns.
Massachusetts Legal Services (www.masslegalservices.org) MASSACHUSETTS ONLY
Massachusetts Legal Services offers resources and services for lower-income Massachusetts residents. Massachusetts Legal Services will connect you with legal aid in your area.
NeighborWorks® America (www.nw.org) **FEDERAL PROGRAM**
NeighborWorks® America is a national nonprofit organization created by Congress to provide financial support, technical assistance and training for community-based revitalization efforts. The NeighborWorks® website provides an overview of its programs and services, which include foreclosure solutions, homeownership education and counseling, and money management skill development. One of the newest additions to its range of resources are the Consumer Home Buying Guides, a set of four consumer-focused guides to various stages of the home buying process. Developed by Fannie Mae Foundation, these guides deliver practical, specific and concise information in a user-friendly format.
MassHousing (www.masshousing.com) MASSACHUSETTS ONLY
The Home Saver Foreclosure Program, a counseling and loan program, helps borrowers act proactively to address their mortgage problems and address them before foreclosure becomes a reality. This program is geared towards moderate income homeowners who meet program guidelines and can afford a modified loan payment. This program is not available to those already in foreclosure or own more than one property. MassHousing also provides information and assistance to individuals and families looking for affordable housing in the state.
Residential Assistance for Families in Transition (www.comteam.org) MASSACHUSETTS ONLY
Through the Housing Consumer Education Center (HCEC) these emergency programs provide help to families experiencing temporary financial setbacks.
RAFT funds must be used to provide short term, limited financial assistance which will enable families to retain housing, obtain new housing or otherwise avoid homelessness.
Funds must be expended for housing related expenses, only. Families in need of supportive services will be referred to appropriate service provider agencies.
Eligible use of RAFT funds may include the following:
Rent arrearages; If household is facing eviction.
Mortgage payment arrearages; If household is facing foreclosure.
Utility arrearages (or heating fuel); If utilities are currently shut-off or if the Household has received a shut-off notice. RAFT funds can be only be used to pay for arrearages incurred on or after December 1, 2006.
Security deposits and first/last months rent; If household needs to move.
Employment-related transportation expenses; If necessary to maintain employment. Total transportation expenses cannot exceed $1,500.
Furnishings; The RNP must determine that such expenses are necessary to ensure that homeless families moving from a shelter environment are able to obtain to their own apartment. Kitchen table/chairs, bedding, and a refrigerator are the only allowable furnishings.
Monthly rental stipend; If rental assistance is needed on a temporary basis and the household can demonstrate it will be able to afford housing expenses going forward.
For more information about Residential Assistance for Families in Transition, Call Patty Puglisi, HCEC Director at (978) 459-0551, Ext. 331.
It is important to understand that all of the above government agencies and non-profit organizations have a limited number of staff and resources available to handle every homeowner’s case. Therefore, homeowners may have much more of a benefit and advantage by retaining qualified legal counsel to represent them.
If you would like more information on short-sales and other potential options that may be available to you, please do not hesitate to contact us directly.
All the Best,
Rick D. Misitano, Senior Paralegal
Law Offices of James M. Bosco
Methuen Executive Park
240 Pleasant Street
Methuen, Massachusetts 01844
Phone: (978) 687-8804
Fax: (978) 687-8872
Cell: (978) 944-0218