Janet Mills, Attorney General for the state of Maine has announced that both GMAC Mortgage and Bank of America have agreed to stop foreclosures temporarily in the state. This announcement comes just as the "robo-signing" controversy of a month ago has begun to die down as other major servicers had agreed to halt foreclosures and conduct internal investigations on their foreclosure departments.
GMAC recently encountered problems in court with its practice of “robo-signing” affidavits in foreclosure cases. Bank of America has agreed not to proceed to judgment on any pending matters in Maine until it has completed an internal review of its foreclosure procedures and until it has informed the Attorney General of its findings and new procedures. According to Bank of America, this could happen as soon as next month.
Attorney General Mills has also expressed frustration with Bank of America's Home Affordable Modification Program (HAMP). Bank of America acknowledged that there were delays due to backlogs.
"My office is receiving calls every day from homeowners who complain that the bank lost the paperwork and that they are unable to speak with the same person twice about their loan," Attorney General Mills said. “My office will continue to insist that the banks devote more resources to loan modifications and to streamlining their modification processes. I advise consumers to be persistent, to contact a HUD-certified counselor and to document attempted contacts with their lender.”
Attorney General Mills has also joined the national effort to change foreclosure practices of the major lenders and loan servicers. While multi-state talks are ongoing, Mills stated that no settlement has been reached. Mills noted that community banks in Maine are not the focus of this effort.
“Our local banks in Maine have been reasonable in handling foreclosure matters because they know their customers and they work with them whenever possible to avoid foreclosure and eviction during hard economic times.”
Attorney General Mills also announced that she is distributing $200,507 in foreclosure relief money from the state's Countrywide Financial Corporation lawsuit settlement. The funds are being distributed to Maine’s 10 Community Action Programs (CAP) based on the population of the areas they serve.
In July 2009, Maine settled its claims with Countrywide alleging that the company had engaged in predatory lending practices and in unfair and deceptive trade practices in connection with its loan servicing business. Under the settlement agreement, Maine received a total of $430,000 to first distribute to eligible homeowners with Countrywide loans who filed claims before the court-ordered deadline. The remainder funds are required by the settlement agreement to be used for foreclosure relief efforts. Attorney General Mills has determined that the remaining $200,000 will go to the 10 CAP agencies.
"The HUD-certified counselors at these CAP agencies have been doing a tremendous job helping consumers who are facing foreclosure," said AG Mills. "These agencies are well aware of the neediest homeowners in their respective areas and they best suited to decide how the money may be used to make the most difference in consumers' lives."
Other settlement terms require Countrywide, which is now owned by Bank of America, to offer qualifying consumers the opportunity for a loan modification. Consumers who do not qualify for a loan modification will be offered relocation assistance payments by Bank of America.
"The loan modification process is very confusing and frustrating for consumers,” said Attorney General Mills. “I urge consumers not to pay for foreclosure assistance. Foreclosure assistance programs that charge fees are often scams. Consumers at risk of foreclosure should contact a HUD-certified counselor.”
For more information, visit www.maine.gov/ag/index.shtml.
