Archive for 'Massachusetts'

In an unprecedented move, investment banking giant Goldman Sachs Group and Massachusetts Attorney General Martha Coakley have reached a settlement amounting to $60 million, a move that is hoped to reduce the number of bank foreclosed homes for sale.

Goldman reportedly played a major role in the subprime lending frenzy that resulted to thousands of homeowners paying mortgages they could hardly afford, and subsequently to the foreclosure crisis that rock the housing market.

Under the agreement, Goldman will lower to almost 35 percent the size of its subprime loans taken out by an estimated 700 homeowners in Massachusetts. The investment bank marketed subprime loans by packaging the mortgages into securities which it sold to investors. The proceeds from the sale of these securities were used to finance new rounds of loans.

The settlement resulted from the 2007 investigation conducted on the subprime mortgage industry which played a role on the foreclosure crisis currently sweeping the country. The investigation started with companies that issued loans with high interest rates to borrowers and eventually, focus on banking institutions that played a significant role in issuing more subprime loans.

In the ongoing investigation, Coakley is determining whether the banks that issued subprime loans knew beforehand that they were unaffordable. She also wants to know if the subprime loans were originally intended for homeowners and were later sold to investors.

Coakley said that Massachusetts courts have determined that many subprime loans were unfair and destined to fail. She added that what the courts are trying to do now is to give homeowners respite and help them avoid bank foreclosed homes for sale.

Meanwhile, Inside Mortgage Finance Chief Executive Officer Guy Cecala said that the settlement case is unique in the sense that an institution which did not originate the subprime loans is being held accountable.

On its part, Goldman said that it is pleased that the matter has been resolved. It is noted that the banking giant did not make any admission of wrongdoing as part of its settlement.

Under the agreement, Goldman will lower the remaining amount due for subprime loans for approximately 714 homeowners in Massachusetts. The reduced mortgage balances will give homeowners options to refinance or sell their properties to avoid bank foreclosed homes for sale.

A lawsuit has been filed against lenders, Fort Washington, Pennsylvania-based GMAC Mortgage LLC and Santa Ana, California-based Deutsche Bank National Trust Co. to stop them from foreclosing two homes in Massachusetts.

According to the lawsuit filed before the Suffolk Superior Court, both out-of-state lenders lack the legal right to foreclose two homes in the state of Massachusetts because they failed to obtain necessary documents to prove that the mortgages were assigned to them.

The lawsuit was filed on behalf of Hyde Park resident Regine Michel and Darlene Manson who resides in Stoneham.

Last March, Manson’s home in Stoneham was foreclosed. She will soon be evicted from her house where she had lived for almost 35 years.

Meanwhile, Michel’s home in Hyde Park where she is living with her two daughters will be included in a foreclosure sale in December 2008.

Gary Klein, a Roddy Klein and Ryan attorney who represents both women, said that GMAC and Deutsche purchased both mortgages on secondary market. However, both lenders failed to complete the paperwork required under the Massachusetts law to prove that the mortgages are already assigned to them.

The case agaist GMAC and Deutsche underscores the disorganized way financial companies buy, package and sell mortgage properties to third parties. Klein is blaming the lending industry for the disorganize foreclosure process in Massachusetts.

He pointed out that most often, paperwork for the acquisition of mortgages is given to private parties and not to the registries of deeds, and lenders push through with the foreclosure process before completing the necessary documents.

Klein plans to file class-action suit on behalf of borrowers who were in similar situations with Michel and Manson. This will provide homeowners ample time to live in their homes and to find ways to avoid foreclosure, such as availing of a federal rescue program.

The lawsuit against GMAC and Deutsche alleged that the foreclosure process in Massachusetts has become a lawless and undisciplined way to seize properties.

According to the Warren Group, foreclosure homes in Massachusetts have been increasing in number. Compared to April last year, the number of foreclosure deeds recorded increased by as much as 300 percent, from 464 to 1,334.

This only means that more and more Americans are losing their homes to foreclosure – thanks to the rising cost of living, aggressive lending practices and declining home prices.

As fears of recession fill the air, many individuals and families have found them selves unable to make ends meet. The prices of basic commodities skyrocketed, primarily due to rising fuel prices in the world market. If you add the weakening dollar, it is not surprising that many homeowners get behind their mortgage payments.

Aggressive lending practices are also considered to be among the top reasons for the high foreclosures rate in the state. Many mortgage brokers cajoled home buyers into taking out loan amounts that they really could not afford. In order to accomplish this, they falsified information on the application form, making sure that the lender approves such an amount. Even those with bad credit were approved for loans without undergoing strict underwriting procedure.

Lastly, many homebuyers who were unsuccessful in working out a new repayment scheme with their lenders are left with the option to sell. But with the declining home prices brought about by the growing supply of homes for sale in the market, it has become increasingly difficult to sell their homes. To make matters worse, the value of these distressed properties in the open market is way lower than the amount of mortgage owed on the property.

With such market condition, local residents of Massachusetts are left with no choice but to wait for the implementation of the mortgage relief program that could hopefully be of assistance to them.

Foreclosures in Massachusetts Cities:

• Boston Foreclosures
• New Bedford Foreclosures
• Lawrence Foreclosures
• Fitchburg Foreclosures
• Revere Foreclosures

As Massachusetts’ foreclosure rate continues to rise, more and more communities outside of major metropolitan areas are starting to see the soaring levels of foreclosure that bigger cities have been experiencing around the country for years.

The city that perhaps best exemplifies this trend is Lynn, a small community 25 miles north of Boston, where foreclosures have increased 84% in the past year alone. Lynn has experienced nearly 1,000 foreclosures in the past year, a startling figure for a town of only 95,000 residents.

Out of the 351 cities and towns in Massachusetts, 282 have seen a drastic increase in foreclosure over the past year, and as January and February each saw increased of nearly 30% in the rate of foreclosure in most of these areas, the trend is expected to take the Bay State to near record levels of foreclosure in 2008. Experts are currently estimating that roughly 37,000 properties could go into foreclosure at some point during 2008, and while not all of them will be sold off, the number is still startling.

Suffolk County, which contains a great deal of the metropolitan Boston area, saw an increase of 65% from 2007 to 2008, showing that the city still maintains a high rate of foreclosure despite efforts to provide counseling and prevention assistance to homeowners in default.

Related Links:

• Suffolk Foreclosure Homes
• Worcester Foreclosure Homes
• Massachusetts Foreclosure Homes
• Foreclosures