December 24, 2012

Maine's General Fund benefits most from mortgage settlement

The diversion seems to violate the spirit of directly helping homeowners, some say.

By Eric Russell erussell@pressherald.com
Staff Writer

(Continued from page 1)

Today's poll: Foreclosure settlement

Do you approve of how Maine used its share of a national foreclosure settlement?

Yes

No

View Results

WHERE'S THE MONEY?

$6.9 MILLION

Maine's share of national settlement with five banks in foreclosure abuse case. Here's how it was distributed:

$1 MILLION

Went to the Maine Bureau of Consumer Credit Protection

$500,000

Went to Pine Tree Legal

$5.4 MILLION

Went into the state's General Fund

But Randall said there is not a lot of transparency in those programs. People don't always know what they're eligible for.

The Maine-based programs that were actually funded as part of the cash settlement are ongoing, too.

Randall said Pine Tree Legal's share has gone to hiring another attorney and another paralegal to assist Mainers hoping to stave off foreclosure or get out from under a bad loan.

Will Lund, with Maine's Bureau of Consumer Credit Protection, said the budget for the foreclosure diversion program was almost dried up before the $1 million was allocated. That money will fund the program for another year or two. The hope is that the foreclosure crisis will have subsided by then.

The program is typically funded through a portion of real estate transfer taxes but a recent change in that formula has resulted in less money.

Lund said his program acts as the front line for homeowners in need of assistance. The bureau staffs a hotline, provide referrals to certified housing counselors and distributes notices and packets of information to borrowers at risk of default.

The program is no less important now, he said, even though most assume the crisis is over.

"We sent out more pre-foreclosures notices in November than any other month we've been doing this," Lund said. "The sustained high volume has lasted longer than anyone thought."

If the crisis persists, funding could dry up without another settlement to replenish assistance programs.

Cox said the funding for the consumer credit protection bureau and Pine Tree Legal was money well spent, but he's not sure how far it will stretch. The state missed an opportunity to use its settlement money to help homeowners, he said.

"It's rare that we don't come away with a resolution if we go to mediation, even if that means a graceful exit from a bad loan," he said. "If we had more resources, we'd have more resolutions."

Staff Writer Eric Russell can be contacted at 791-6344 or at:

erussell@pressherald.com

Twitter: @PPHEricRussell

 

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Today's poll: Foreclosure settlement

Do you approve of how Maine used its share of a national foreclosure settlement?

Yes

No

View Results