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Maine Receives State Portion of Funds in Mortgage Servicing Settlement
June 1, 2012
Foreclosure Prevention and Legal Assistance to Homeowners Programs to Benefit
AUGUSTA ? Attorney General William J. Schneider announced that Maine has received the state portion of settlement funds from the landmark $25 billion joint federal-state agreement over foreclosure abuses, fraud and unacceptable nationwide mortgage servicing practices.
The state received a direct payment of $6.9 million for continued funding of state foreclosure prevention programs, legal assistance to homeowners in foreclosure, and compensation to the state?s general fund.
?These prohibited foreclosure practices were costly to individual Maine borrowers and strained foreclosure prevention programs and safety net services across the state,? said Attorney General Schneider. ?Funds received through this settlement are targeted to get relief directly to homeowners through existing programs with proven records of success and offset some of the cumulative impact through compensation to the state?s general fund.?
In addition to the direct payment to the state, Maine?s borrowers who are in default on their mortgages will receive an estimated $7 million in direct borrower relief through principal reduction, short sales, borrower transition efforts, and other mortgage modification measures. Maine?s borrowers who lost their home to foreclosure from January 1, 2008 through December 31, 2011 qualify for a cash payment from a $1.9 million fund set aside for this purpose. The value of refinanced loans to Maine?s underwater borrowers who are current on their loans is estimated at $4.5 million.
?This settlement resulted from claims that national lenders used unfair foreclosure procedures,? said Will Lund of the Bureau of Consumer Credit Protection, which administers Maine's foreclosure diversion program. "It is appropriate that a portion of the funds will be used to assist Maine families obtain loan modifications so they can stay in their homes."
The Bureau of Consumer Credit Protection foreclosure prevention program matches Maine based U.S. Housing and Urban Development (HUD) certified counselors with distressed homeowners. Consumers facing mortgage delinquency and default can contact 1-888-NO-4- CLOZ (1-888-664-2569).
Increasing demand for services and limited resources have impacted the ability of low-income homeowners facing foreclosure to get affordable legal assistance in Maine. Pine Tree Legal will use funding from this settlement to restore staff capacity in order to accept new foreclosure cases.
?We are extremely excited to be a recipient of the funding through the Attorney General,? said Chet Randall, Attorney at Pine Tree Legal. ?Without this funding, we faced shutting down our foreclosure prevention work. The Pine Tree Board and staff will discuss the best way to manage this funding over a two to three year period in order to provide targeted legal services to those who can benefit most from this service.?
Homeowners in need of legal assistance can contact Pine Tree Legal local offices with questions. Go to http://www.ptla.org for more information.
Go to http://www.NationalForeclosureSettlement.com for more information on this settlement, including frequently asked questions.
To find out if you are eligible for any of the benefits of the settlement contact your mortgage servicer: Ally/GMAC: 800-766-4622 Bank of America: 877-488-7814 Citi: 866-272-4749 Chase: 866-372-6901 Wells Fargo: 800-288-3212