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For Struggling Homeowners, Skepticism And Hope

Rob Varnon,

For two years, Frank DuBois has listened to promises that never came to fruition from his bank as he fought to keep his Stratford home. So he and other people on the front lines of the foreclosure crisis were skeptical that the newest set of promises — couched in a $25 billion multistate settlement unveiled Thursday — would finally deliver actual help.

“That’s fine, but are they going to follow guidelines?” asked DuBois, who has been trying to modify the mortgage on his home.

Like many people, his personal economy tanked along with the global economy a couple of years ago. He got injured on the job and is on a fixed income for now while his partner continues to work. They bought the house during the real estate boom, and now their income can’t support the mortgage. In the meantime, they can’t refinance because they owe more on the outstanding mortgage than what the house can fetch in the market.

In Connecticut, according to CoreLogic, a real estate research and document filing data company, 3.1 percent of all mortgages in Connecticut were in foreclosure in November 2011. In Fairfield County, that number is higher, at 4.53 percent, with the most activity in the larger municipalities, including Danbury, Stamford and Bridgeport. More than 7 percent of all mortgages in the state and county are 90 days or more behind.

While DuBois is not in foreclosure, he has spent much of his time trying to get a modification from the bank or through the myriad federal programs that have popped up over the years.

He said he doesn’t understand the settlement and doesn’t believe it will help, though others, including a housing counseling agency, said this is the long-overdue help people have needed.

On Thursday, 49 state attorneys general with federal officials signed a $25 billion settlement with JP Morgan Chase, Citigroup, Wells Fargo, GMAC and Bank of America, DuBois’ bank. The banks pledged to help homeowners who are underwater by providing principle reductions. They also agreed to provide assistance to delinquent customers and $1,500 in restitution to people who lost homes due to what the attorneys general call abusive foreclosure practices.

“Why not send homeowners direct relief?” DuBois asked. “Why fund federal foreclosure programs, which aren’t working now?”

He said he was disturbed by the size of the payment to people who lost homes because banks filed faulty foreclosure documents or engaged in other questionable practices.

Stamford attorney Mark Sank, who has 100 clients now fighting foreclosures, was more optimistic about the settlement.

“Hopefully, with this deal, there’s incentive for the banks to hire more people to implement this,” he said, adding he’s received emails all morning from clients asking, “This sounds great, but is it really going to help me?”

Sank said the biggest problem he’s faced in trying to win modifications is the lack of staff the banks have on hand. He said he’s had banks sit on paperwork so long the data becomes out of date and he’s forced to file new paperwork.

Joan Carty is president and chief executive of the Housing Development Fund of Connecticut, which provides foreclosure mitigation assistance to families in Fairfield County. She said the program is the first step, though a late one, toward finally getting a grip on the problem.

“Rather than dwelling on wishing it would have come earlier, I like to concentrate on going forward from here,” she said. “Some families will get assistance and get their mortgages right sized. … It’s energy going in the direction we want it to.”