In the wake of the recent law suit filed by Massachusetts Attorney General Martha Coakley, so far 1 of the 5 lenders/banks has pulled the plug on Massachusetts. This leaves fewer options for homeowners who are seeking to purchase property or refinance existing loans. The suit alleges that the 5 lenders may have bypassed paying recording fees at MA Registries and she now wants lenders to prove they own loans before foreclosure. Not sure if the consumer in MA has been helped by this as it will slow the process down when we will all be better off the quicker we get through it. The other lenders/banks indicate they will continue to do business at this time in Massachusetts.

This suit apparently does nothing to recognize that the homeowner has probably stopped paying the lender for a period of time, taking that money out of the economy, and a violation of their agreement to pay the lender, and that is why the lender is trying to foreclose. No lender wants to own property which is why a foreclosure is a last resort. A foreclosure is bad for everyone involved. The lender loses months or even years of payments, and the borrower will eventually be required to leave the property and return it, rightfully so as they agreed, to the lender. In the end no one wins.

Look at it this way, if you owned a rental property and the tenant stopped paying rent, how long would you tolerate that, particularly if you needed that rent payment to pay your car payment…..you get the picture. The lenders/banks may not have their best foot forward in this crisis, but they are also victims of this as well, as hard as that may be to accept.

It may be time for a “Cash for Keys” program again. This is not a new concept as it has been used in the past. In lieu of foreclosure, a lender/bank could offer a cash payment to the borrower to turn over the property to the lender/bank. This would accomplish 2 important things. The lender/bank would be able to take ownership of the property quicker and with much lower legal fees, and the borrower would have funds to move elsewhere as they chose. Getting the house back on the market is what the economic engine needs. Those missing payments have brought down businesses everywhere and have hurt most consumers here in Massachusetts.. If the monthly payments can get circulating in the economy again it will be better for us all.

I felt compelled to rant - this is my point of view as a mortgage broker, and a paying mortgagor here in Massachusetts. Nobody is telling the other side of the story. Brad.

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