Massachusetts Foreclosure Prevention Bills Move Forward – March 17, 2010
State Legislature’s Joint Housing Committee Advances Foreclosure Relief Legislation
Bill Provides New Tools to Prevent Foreclosures and Mitigate Impacts on Neighborhoods
BOSTON – MARCH 16, 2010 – Today, Representative Kevin Honan (D-Allston-Brighton), Senator Susan Tucker (D-Andover) and the Joint Committee on Housing favorably advanced An Act Relative to Stabilizing Neighborhoods, S. 1379 and H. 3571. The legislation includes a multi-prong strategy to address the Massachusetts foreclosure crisis.
“Foreclosures continue to hurt Massachusetts by displacing families and driving down property values in struggling neighborhoods”, said Aaron Gornstein, CHAPA Executive Director. “We commend bill sponsors Senator Tucker, Representative Honan, Representative Malia, Senator Chandler, Representative Martin Walsh, Senator Chang-Diaz and the Housing Committee for their support in advancing critical foreclosure relief measures.”
“The Joint Committee on Housing released a bill that will ensure tenants in Massachusetts are treated fairly when their landlord’s property is foreclosed,” said Joseph Kriesberg, President and CEO of the Massachusetts Association of CDCs (MACDC). “Foreclosures continue to tear apart families and neighborhoods. This bill will ensure there are protections and resources to deal with this ongoing crisis.”
The foreclosure relief bill accomplishes the following six steps:
1) Includes a new mediation process for lenders and homeowners to work together to create a mutually-acceptable loan modification solution based on the net present value of the home. The mediation program would be voluntary but lenders that do not participate will have to wait 150 days to foreclose on the property.
2) Provides eviction protections to tenants in foreclosed properties who are in good standing and continue to pay rent.
3) Requires counseling in order to receive a reverse mortgage. A reverse mortgage is where a homeowner receives a loan on their home equity and the loan is paid back when the homeowner sell the home or passes away. Reverse mortgages are typically offered to seniors.
4) Creates an abandoned and foreclosed property registry to track distressed properties.
5) Encourages redevelopment of foreclosed properties by providing a local option to exclude nonprofits from property taxes during the term that the nonprofit rehabilitates the home and converts it into affordable housing.
6) Criminalizes mortgage fraud.
S. 1379 now moves to the Senate Committee on Ways and Means and H. 3571 now moves to the House Committee on Ways and Means for each branch to deliberate.
Continued Struggles with Foreclosures in Massachusetts
The Federal Reserve reports that approximately 33,300 Massachusetts homeowners are delinquent on their home loans due to a combination of high unemployment, negative property equity, (where the homeowner owes more than the value of the home) and risky lending. The Massachusetts Housing Partnership Foreclosure Monitor indicates that an additional 30,700 Massachusetts homes are bank-owned or in the foreclosure process.
Last year, 27,928 foreclosure petitions, the first stage in the foreclosure process, were filed in Massachusetts, up 28.1 % from 2008. In 2009, 9,269 foreclosure deeds were recorded in 2009, down from 2008 but still very high. Despite persistent local, state, and federal administrative intervention, additional tools are needed to address foreclosure challenges.
Fore more information on foreclosures in Massachusetts, please visit the CHAPA Clearinghouse on Foreclosure Information at http://www.chapa.org/?q=foreclosure_browseor or the MHP Foreclosure Monitor at http://www.mhp.net/vision/resources.php?page_function=detail&resource_id…
Please click here to download the original press release.