N.E. banks urge troubled homeowners to seek help

Governor Deval L. Patrick (left) and Eric Rosengren, president of the Boston Fed, confer. The Fed coordinated an effort by several banks to help struggling homeowners. (Pat Greenhouse/Globe Staff)

Five of the largest banks in New England yesterday launched a coordinated marketing campaign to alert homeowners with subprime loans that it may be possible to refinance into fixed-rate loans.

The campaign, a response to the rising number of foreclosures, is focused on homeowners who may be at risk of foreclosure because of an upcoming increase in their monthly mortgage payments.

It includes a pledge to make $125 million available for refinancing. The pledge is largely symbolic. The banks said the money was already available and applicants still must meet standard lending requirements.

"Putting a big number like this out there creates the attention," Lawrence Fish, chairman of Citizens Financial Group, said at a news conference yesterday at the Federal Reserve Bank of Boston, which orchestrated the effort. "We need homeowners who are affected to come forward."

The other participants are Bank of America Corp., Sovereign Bancorp Inc., TD Banknorth Inc., and Webster Financial Corp. The banks have created a website with eligibility and contact information: mortgagerelieffund.com. An ad running today in publications across New England, including The Boston Globe, encourages borrowers to call the banks or visit the website.

Hundreds of thousands of homeowners nationwide are facing scheduled rate increases on their mortgages in the coming months. This new loan effort is but one of many such programs that have been formed to help borrowers who cannot afford those new, higher mortgage payments.

Earlier this month, for example, the Bush administration coordinated an effort among the nation's leading mortgage holders that would offer to freeze interest rates for up to five years for certain qualifying borrowers.

Others, including the state of Massachusetts, have launched refinancing programs similar to the plan unveiled by the Boston Fed yesterday. So far, those refinancing programs have enjoyed little success, in part because they have attracted few applicants who qualify for assistance.

Yesterday's announcement reflects a belief that the problem is a lack of advertising and media attention.

"You have to help us," Governor Deval L. Patrick, who spoke at the news conference, told a reporter.

Binyamin Appelbaum can be reached at bappelbaum@globe.com.