State, top lenders will seek remedies to foreclosure woes

By Keith Reed, Globe Staff  |  June 27, 2007found at 

State officials and executives from leading mortgage lenders are expected to meet today to discuss possible remedies to Massachusetts' wave of foreclosures.

The meeting was called by Dan O'Connell , the Patrick administration's secretary of housing and economic development , who wrote a letter asking the chief executives of the top 10 mortgage lenders in the state to attend, according to a person who has seen the letter but asked not to be identified. The letter did not spell out an agenda for the session, to be held at in the offices of Daniel Crane , director of the Office of Consumer Affairs and Business Regulation.

O'Connell's spokeswoman, Kofi Jones , confirmed the meeting last night but declined to provide additional details. O'Connell was unavailable for comment, she said.

"We're inviting a number of players to the table in the hopes of finding solutions to the foreclosure issue. It is our hope to protect the integrity of the process," she said.

Massachusetts is experiencing a spike in filings to foreclose on delinquent loans, largely driven by the number of subprime mortgages written in the past several years. Such loans are written to borrowers with poor credit histories and were popular during the housing boom because they often offered low "teaser" rates that made initial monthly payments on costly Massachusetts homes more manageable.

But in many cases, borrowers stretched to afford the homes in the first place, and then fell behind when their mortgage rates adjusted sharply upward after a few years, giving rise to the foreclosures.

Governor Deval L. Patrick has already proposed legislation containing a series of measures he said would curb the rate of foreclosures, including a requirement that applicants for adjustable-rate mortgages with high interest rates sign a form offered by the lender stating they don't want a fixed-rate mortgage instead. Also, a Mortgage Summit Working Group, convened earlier by the Patrick administration and composed of lenders, activists, and regulators, recommended in April that the state provide money to refinance loans for homeowners in over their heads.

And the state's banking commissioner, Steven Antonakes , in April said he had won temporary freezes on foreclosures for 11 homeowners in the state and was helping others. That action came after Patrick instructed members of his administration to help troubled homeowners by negotiating directly with lenders on their behalf.

Keith Reed can be reached at reed@globe.com.