New Federal Reserve Program Allows Consumers Facing Increasing Interest Rates to Refinance Their Loans
CONCORD, December 20, 2007 – Gov. John Lynch today alerted New Hampshire homeowners who may be at risk of foreclosure to about a new program created by the Federal Reserve Bank of Boston and five New England Banks.
The initiative, called the Mortgage Relief Fund, is intended for homeowners with adjustable rate mortgages due to reset to higher levels in the coming months. The five banks have committed $125 million to the program to allow consumers with adjustable rate mortgages to refinance their loans.
“More and more New Hampshire families are facing the possibility of foreclosure due to flexible interest rates resetting at higher levels. I urge New Hampshire homeowners to take the necessary precautions to guard against possible foreclosures,” Gov. Lynch said. “As Governor, I want to make sure the State of New Hampshire is doing everything possible to help protect consumers and it is my hope homeowners will take advantage of the various programs available to them.”
The Federal Reserve Bank of Boston, which helped create the program, estimates there are 15,000 homeowners in New Hampshire with adjustable rate mortgages. The banks participating in the Mortgage Relief Fund program are Citizens Bank, Sovereign Bank, TD Banknorth, Webster Bank and Bank of America.
For more information about the program, go to www.mortgagerelieffund.com.
Gov. Lynch and the State of New Hampshire have also taken steps to help consumers address potential mortgage problems, including:
- The New Hampshire Banking Department has established a Hotline to assist consumers who have concerns about their mortgages or who are facing imminent foreclosure. The Hotline number is 1-800-437-5991, and will be answered by Department staff between 8 a.m. and 4:30 pm. Messages received after hours will be returned the next business day.
- Banking Commissioner Peter C. Hildreth has signed an order requiring every New Hampshire-licensed mortgage lender and servicer to designate a direct contact that the Department, and consumers, can speak with directly about options.
- Banking Commissioner Peter C. Hildreth has signed an order requiring mortgage lenders and brokers to be clearer about their standards for subprime loans and the risks that borrowers may assume. This order seeks to ensure consistent regulation of the mortgage market and will be an important tool for the Banking Department to protect consumers in the subprime lending market.
- The New Hampshire Banking Department is continuing to hold Consumer Outreach sessions around the state where Banking Department staff review consumers’ mortgage documents and answer questions that New Hampshire citizens may have about upcoming changes in their payments.
Earlier this year, Gov. Lynch signed House Bill 365 into law, which aims to better protect borrowers from foreclosure rescue scams.
This new law aims to protect homeowners from losing their homes – and the valuable equity they have built into their homes – to foreclosure rescue scams. It imposes new standards on pre-foreclosure sales, requires greater disclosure from foreclosure consulting companies and it creates stiff penalties for those who take advantage of homeowners. The penalties include fines, jail time and repayment of equity to the homeowner.