AG Seeks OK to Spend Millions in National Mortgage Settlement

New Hampshire Attorney General Michael Delaney is scheduled to appear before Gov. John Lynch and the Executive Council today for approval to accept and spend some of the estimated $43.6 million the state receives from the National Mortgage Settlement.

The combined $8,062,853 in spending in two items would be contingent on approval of the legislative Fiscal Committee, as well.

The first item calls for $6,504,769 for providing "direct and indirect assistance" to distressed homeowners and for increased law enforcement resources related to the investigation and prosecution of financial fraud.

The funding would authorize four new full-time, temporary positions: an attorney, an investigator, a managing financial analyst, and a paralegal to assist in investigating and prosecuting financial fraud, including banking, mortgage and securities fraud. A part-time secretary would also be created as part of that initiative.

The second item, according to the Executive Council agenda, would authorize the Attorney General's office to enter into a $2.5 million agreement with the NH Housing Finance Authority to provide services related to foreclosure prevention, credit and debt counseling, and post-foreclosure issues.

The agreement would also involve contracts designed to provide greater access to legal services for homeowners facing foreclosures. The contract agreements would be with NH Legal Assistance, Legal Advice Referral Center, and NH Bar Association Legal Services.

The Executive Council is scheduled to meet today, Aug. 22, at Nashua Community College in Nashua.

In another piece of business before governor and council, the Banking Department is seeking authorization to enter into an agreement with the NH Housing Finance Authority for distribution of the mortgage settlement through HUD-certified housing counseling agencies for pre-foreclosure intervention and counseling. The programming would include post-foreclosure counseling and statewide public information and outreach to borrowers over a three-year window.

The request, to that end, would further authorize the Conference of State Bank Supervisors to transfer $1 million in settlement funds to the Housing Finance Authority to provide the foreclosure help services.

New Hampshire joined the national settlement back in February. The $25 billion settlement – New Hampshire with 48 other states and the federal government – is with five of the largest banks and mortgage servicers.

Delaney said in February the state would receive a direct payment of $11 million as part of the state share. In that announcement, he said, "This agreement not only provides much needed relief to New Hampshire borrowers, but it also puts a stop to many of the bad behaviors that contributed to the mortgage mess in our state and across the country."

The worst of the foreclosure trouble may be over in New Hampshire, but improvement in the pace of foreclosures will be slow, according to the Housing Finance Authority. In its monthly update on foreclosures, the NHHFA forecasts that foreclosed and distressed properties will continue to have a negative influence on home sales and prices.

Through June, New Hampshire has only 71 fewer foreclosure deeds recorded than the similar period in 2011.

The chart below represents foreclosure deeds compiled by NHHFA, using Real Data Corp. information.

The toll-free mortgage hotline: (866) 522-4450.