Published on Boston Herald, by Jay Fitzgerald, February 8, 2008.
Attention struggling homeowners facing possible foreclosure: You’re largely on your own.
That’s the conclusion of a new report that says the vast majority of financially hard-pressed borrowers aren’t getting help to avoid foreclosures, despite vows by politicians and industry groups to assist people burdened by high-interest-rate mortgages.
Seven out of 10 seriously delinquent borrowers are either not assessing ways to prevent foreclosure or can’t cut through the confusing bureaucratic morass to cut deals with mortgage servicers, according to the State Foreclosure Prevention Working Group.
The report by the group, which is an initiative of 37 states’ attorneys general and the Conference of State Bank Supervisors, said there has been some progress made in reaching out to those facing foreclosures …
… Both the mortgage industry and government are to blame for not doing enough, said Massachusetts Attorney General Martha Coakley.
There are going to be continuing huge problems for individuals, Coakley said.
One of the biggest frustrations is that so many of the subprime mortgages were packaged together and sold off as securities, leaving them tangled in a web of paperwork that makes it difficult to find out who can cut deals with borrowers, Coakley said.
Another problem is that home values are falling, making it difficult for people with subprime loans to switch to more conventional prime loans, said Kevin Cuff, executive director of the Massachusetts Mortgage Bankers Association. (full text).