For struggling homeowners, a chance for mortgage relief

With 28,000 mortgages in foreclosure, state officials are stepping up efforts to help struggling homeowners by sponsoring an all-day event in Hartford next week where borrowers can meet one-on-one with lenders and counselors.

“We encourage any Connecticut homeowner that’s having trouble paying their mortgage to come to the event,” Banking Commissioner Howard F. Pitkin said today at a press conference with Gov. Dannel P. Malloy and Attorney General George Jepsen.

Dozens of lenders and agencies that provide counseling and other assistance will be available from 10 a.m. to 7 p.m. on Nov. 15 at the Connecticut Convention Center in Hartford.

“We believe that this is a unique opportunity,” Malloy said. “Even if you’ve gone to something like this or sat down with a counselor previously, come again. Let’s give it another try. Your circumstances may have changed. The opinions of the banks, the lending institutions, may also have changed.”

Jepsen, who has met with every major mortgage lender and servicer since taking office in January, said the mortgage industry has learned that foreclosures in this housing market are bad for business and bad for communities.

“There is no bigger issue in America today than restoring stability to our real estate markets,” Jepsen said. “We’re not going to have a national economic recovery until consumers are confident in the values of their homes. So this is not simply about helping individual homeowners, although that’s the critical focus. It’s about helping our larger economy, helping our communities.”

More information, including particpating lenders and instructions on documents to bring, are available on the web sites of the attorney general’s office and the banking department.

About 20 percent of people can expect to get mortgage modifications on the spot, with another 20 percent who will obtain relief after providing further documentation, Jepsen said.

The officials said they have detected a softening in attitudes by lenders toward modifications over the past year. At the beginning of the year, they were adamantly opposed to any reductions in principal, Jepsen said.

Bank of America announced months ago that its gesture toward struggling homeowners would be to open a regional walk in center in Dedham, Mass., for the northeastern states, Jepsen said.

“We communicated very clearly we thought that was pathetically inadequate. If you live in Bridgeport, you might as well be going to China as going to Dedham, Mass.,” Jepsen said. “Bank of America listened.”

They now have a walk-in center in Southington, joining Webster Bank and Chase Home Lending with similar offices in Connecticut.

Webster, a regional bank based in Waterbury, was featured in a recent Wall Street Journal article as a leader in modifying mortgages.

Robert Guenther, the bank’s senior vice president for public affairs, said today that bank’s willingness to help struggling homeowners is good business, saying that foreclosures make no sense in this economy.

Webster declared a moratorium on foreclosures in 2008.

“We realized the way we always did business wasn’t going to work,” Guenther said.

Webster’s size and its close relationship with customers – it owns a majority of the mortgages it services – has proved to be an advantage. At Webster, people who chase late payments sit with loan-modification specialists, able to make quick referrals.

But Guenther said the scale of large banks like Bank of America, which took over the portfolio of the failed mortgage giant, Countrywide, is no excuse for failing to respond to a changing market.

Frank Benegoss, an assistant vice president at Chase, said the loan-modification walk in center he opened in July in Stratford is one of 82 Chase has established around the country to find alternatives to foreclosure.

Chase has since avoided 675,000 foreclosures, he said.

Benegoss said he especially understands mortgage holders who have been hit with long-term unemployment.

He was jobless for 18 months after being laid off from GE Capital.