New England banks pledge help in mortgage crisis

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(Host) New England’s five largest banks are putting up $125 million to help homeowners who are caught in the national credit crisis.

The banks say they’ll use the money to help people refinance high-interest loans, or high-cost adjustable-rate mortgages.

The banks worked with the Federal Reserve Bank of Boston in coming up with the program.

Eric Rosengren is president of the Federal Reserve Bank of Boston and he announced the program in a conference call.

Rosengren says the commercial banks will be able to take advantage of federal insurance and various state programs to help consumers get out of risky loans and into conventional mortgages.

(Rosengren) "These programs allow banks to offer borrowers a lower interest rate, similar to that of prime borrowers, which could result in savings of hundreds of dollars per month and the peace of mind of a fixed-rate mortgage.”

(Host) Two of the participating banks do business in Vermont – Citizens and TD Banknorth.

The banks are inviting people who are facing problems with their mortgages to contact them and find out if they qualify for a new, cheaper loan.

Larry Fish of Citizens Bank says the credit crisis has gotten a lot of attention in New England’s urban centers.

But he says it’s also important to rural northern New England.

(Fish) "This is for all of New England. This is as important to neighborhoods in Rhode Island and Connecticut, Vermont and Maine and New Hampshire. Obvious the biggest market is here in eastern Massachusetts. But it is very definitely a program for the entire region.”

(Host) The banks have set up toll-free telephone numbers that will be staffed by mortgage counselors.

There also is a Web site that borrowers can use to figure out whether they might be able to get help.

The banks and political leaders are encouraging consumers who are struggling to explore the program.

They say too many consumers have been unwilling or afraid to seek out help.


AP Photo/Gregory Smith

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