AUGUSTA – It was disappointing to read the Portland Press Herald article about the mortgage abuse settlement among five leading banks and several states, including Maine (“Maine’s general fund benefits most from mortgage settlement,” Dec. 24).

The headline, subheadline, language choice and poll-of-the-day pushed one term of a huge global settlement agreement to the forefront, by which the newspaper seemingly intended to provoke a negative reaction in the reader rather than inform in a balanced way.

The omission of factual information about the rest of the settlement, which was painstakingly provided to your reporter by the chief of the consumer division of my office, resulted in an unfairly biased and flatly unhelpful article.

During the foreclosure crisis, there were borrowers who wrongly suffered the loss of their homes. Many others hung on while the value of their homes dived below the balance on their loans. Even those households not in danger of foreclosure watched their primary asset lose value. The negative economic impact extended throughout communities and put a strain on safety net services across the state.

The state attorneys general and the federal government negotiated a settlement that provides assistance directly to homeowners needing loan modifications, to borrowers who are current but under water, and to borrowers who lost their homes between 2008 and 2011. The settlement includes important nationwide reforms for new mortgage loan servicing and foreclosure standards. In addition, a portion of the settlement funds were designated for the states to allocate to programs or assign as penalties.

Maine will receive more than $29 million as a result of the settlement. An independent monitor will ensure mortgage servicer compliance, and the five largest servicers will not be immune from criminal prosecution or individual, institutional or class-action civil suits.

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This comprehensive agreement reflects the complexity of the mortgage market and the scope of harm caused by the crisis. For the Consumer Division of the Maine Attorney General’s Office, the mortgage settlement is among its major accomplishments for the consumers of this state.

Implementing this agreement will take years. After participating in the settlement negotiations to reach an agreement that would provide relief for Maine consumers, the Office of the Attorney General joined with Maine’s Bureau of Consumer Credit Protection, which administers Maine’s foreclosure diversion program, and Pine Tree Legal, which represents distressed homeowners, to immediately channel funding to gold-standard programs that directly benefit borrowers.

Cognizant of the cumulative support that state-funded programs provide to citizens of Maine in the wake of the foreclosure crisis, both preceding the mortgage settlement and while the settlement is implemented, funds were allocated to the general fund.

But neither this unprecedented settlement, nor the existence of funding, can provide full relief without affected borrowers engaging in the processes provided through either government agencies or the banks.

Eligible Maine borrowers who lost their homes due to foreclosure must file a National Mortgage Settlement Claim form by Jan. 18 in order to receive a cash payment from a fund set aside for this purpose. As of December 2012, notices had been mailed to 2,538 eligible borrowers in Maine, and 1,056 claims had been filed, for a filing rate of 51 percent.

Many eligible borrowers who were foreclosed upon by one of the top five servicers have not yet filed their claim forms. After Jan. 18, they may not be able to qualify for a cash payment from this fund. One of the key provisions of the mortgage settlement is this direct payment, and I encourage eligible borrowers to take advantage of this remedy.

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When the Portland Press Herald recently contacted the Consumer Division of the Attorney General’s Office regarding the mortgage settlement, this was another opportunity to provide information that would assist Mainers in accessing the assistance that is available.

The reporter was provided extensive information and resources, including the settlement monitor’s Office of Mortgage Settlement Oversight website — www.mortgageover sight.com — and an information hotline, (866) 430-8358. Unfortunately, the Press Herald did a disservice to its readership when it did not seize this opportunity in its article of Dec. 24.

William J. Schneider was Maine’s attorney general from 2011 to Jan. 7.

 


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