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The Boston Globe

Business

Martha Coakley presses banks on loans

New rules may help borrowers save homes; mortgage firms asked to show they comply

Concerned that some mortgage lenders are not complying with a new foreclosure law, Massachusetts Attorney General Martha Coakley is asking banks to confirm in writing that they are following state rules to help troubled borrowers save their homes.

Specifically, Coakley is concerned that loan servicers are not complying with a provision, made effective in November, that allows lenders to modify a loan even if there is a second mortgage on the property. Many lenders are reluctant or unable to negotiate a mortgage modification if there is a second loan and another lender involved in the property, which complicates the process.

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