MA Senate to Vote on Bill to Clean Up Foreclosure Crisis
Wednesday, June 06, 2012
The proposed bill is called An Act Preventing Unlawful and Unnecessary Foreclosures. If passed, it would hold banks to a new standard – requiring lenders to determine if the cost of foreclosure is less than the cost of loan modification. According to Grace Ross, a member of the Worcester Anti-Foreclosure Team, that is rarely the case.
“We know there are studies out there that they lose a lot less money if they modify loans,“ said Ross.
While Ross sees this legislation as a step in the right direction, she claims the current form of the bill could actually make the process harder for homeowners.
“Banks can sign a document saying they went through the appropriate foreclosure process and they wouldn’t have to prove that in court,” Ross said. “That would undermine the Attorney General’s new standard and hurt a whole slew of new people.”
And that isn’t Ross’s only problem with the legislation. She says it neglects to outline any formal notification process. In other words, nothing will be done to notify homeowners who could use the bill as leverage for loan modification or to secure more time for negotiation.
The Attorney General’s Office says the most important issue is getting the bill passed.
“We’re confident the Legislature will carefully consider amendments being filed by advocates on all sides of the issue,” said Brad Puffer, Director of Communications for the Attorney General’s Office. “One thing we cannot do is nothing. Homeowners need protections now.”
According to Ross, those protections should include mandatory mediation during pre-foreclosure and fair rent opportunities for both homeowners and tenants post-foreclosure. Ross is working with the Mass Alliance Against Predatory Lending to appeal to senators before the vote.
“Every other New England state has some version of this,” Ross said. “Massachusetts is behind the eight ball on making sure that homeowners get face to face with lenders before their home is foreclosed on.”
Foreclosure activity across the state has increased in 2012. The situation is particularly bad in Worcester County, where more than 700 foreclosure petitions have been filed since the start of the year.
“I wasn’t even aware, until it hit me personally,” says Mildred, a Worcester homeowner currently fighting foreclosure. “I was driving around and I saw all these signs and I said, “What the heck is going on.’”
“The Legislature, in theory, is not supposed to legislate that people act in their own self interest,” Ross says. “But at this point the banks are making choices that damage their own bottom line and homeowners.”
- MA Senate to Vote on Bill to Clean Up Foreclosure Crisis
- Grace Ross: Foreclosure Crisis No Where Near Over
- Why Worcester County Foreclosures Have Skyrocketed