Massachusetts Attorney General Martha Coakley has announced that mortgage-related and foreclosure-specific complaints have quadrupled over the past two years to become the number one reason consumers contacted the Attorney General’s Office for assistance in 2011. The Public Inquiry and Assistance Center (PIAC), Local Consumer Programs (LCP) and regional offices across the Commonwealth combined to handle 983 complaints reporting issues with mortgages, foreclosures and loan modifications in 2011, representing a 431 percent increase since 2009. For the first time ever, mortgage complaints ranked first in 2011, outnumbering those related to auto sales, leasing and defective auto parts by 164.
“This data confirms what we have known for some time—the sub-prime lending and foreclosure crisis is a major concern for homeowners who are often faced with losing their most valued possession,” said AG Coakley. “It is further evidence that resolving this foreclosure crisis is the single most important thing we can do to restore a healthy economy. Our office has filed legislation to comprehensively address this issue and brought a landmark suit against the banks seeking real accountability for their unlawful conduct and relief for homeowners.”
In December, the AG’s Office filed the first comprehensive lawsuit to address the foreclosure crisis by seeking to hold banks accountable for illegal and deceptive conduct. Filed against Bank of America, Wells Fargo, JP Morgan Chase, Citi and GMAC, the lawsuit sues the banks for their role in allegedly pursuing illegal foreclosures on properties in Massachusetts as well as deceptive loan servicing.
An Act to Prevent Unnecessary and Unreasonable Foreclosures was filed by AG Coakley last year with Sen. Karen Spilka and Rep. Steven M. Walsh. If passed, the bill will prevent foreclosures by setting standards and mandating loan modifications in certain circumstances. Specifically, the legislation requires creditors to take commercially reasonable efforts to avoid foreclosure on certain mortgage loans secured on homes occupied by owners as their principal residences. Currently, the legislation is being considered by the Joint Committee on Financial Services.
AG Coakley’s office has been a national leader in holding banks and investment giants accountable for their roles in the economic crisis. AG Coakley has obtained recoveries from Morgan Stanley, Goldman Sachs, Royal Bank of Scotland, Countrywide, Fremont Investment & Loan, Option One, and others on behalf of Massachusetts homeowners. As a result of these actions, her office has recovered more than $600 million in relief for investors and borrowers, helped keep more than 25,400 people in their homes, and returned nearly $60 million in taxpayer funds back to the Commonwealth.
