Struggling homeowners trying to get lenders to modify unmanageable mortgage loans would get help from new legislation proposed by Attorney General Martha Coakley. She's filed legislation to require creditors to make reasonable efforts to help homeowners restructure their home loans and avoid foreclosure.
The law would only apply to borrowers living in their homes with risky loans, such as interest-only loans, adjustable-rate mortgages, or short-term introductory rates, the attorney general's office said. Coakley, who spoke at a Greater Boston Chamber of Commerce breakfast, also proposed creating a statewide registry for vacant and foreclosed housing, similar to a program already underway in Boston.
The efforts are meant to deal with the state's growing foreclosure crisis in which 12,430 borrowers lost their homes last year, a 62 percent increase from 2007. "Loan modifications stabilize the marketplace, stop the escalation of foreclosures, and ensure cash flow so that mortgage and mortgage-backed investments can again be valued," Coakley said.