Senator Petruccelli Votes to Protect Residents
against foreclosures
FOR IMMEDIATE RELEASE
May 3, 2010
Senator Petruccelli Votes to Protect Residents Against Foreclosures
BOSTON –With home foreclosures continuing to rise in the
Commonwealth in spite of some improvements in the economy, Senator
Anthony Petruccelli (D-East Boston) voted for legislation that
protects residents from mortgage fraud, protects tenants in
foreclosed properties from arbitrary evictions and helps people stay
in their homes. The legislation, part of a series of consumer
protection bills that passed the Senate, was approved unanimously.
“This bill is a comprehensive measure that will help to protect
consumers and stem the tide of those losing their homes, whether as
renters or owners,” said Senator Petruccelli. “The foreclosure
crisis, and the attendant negative effects on families, needs to be
rigorously curtailed before we see economic stability.”
During this crisis, many renters have found themselves without a
place to live with little or no reason or warning, after their
building has been foreclosed on. Several initiatives are included in
the bill to protect renters.
Tenants in foreclosed buildings can only be evicted for just cause,
or if the building is purchased by a third party. Also, a lender
cannot evict a tenant for failure to pay rent unless it has posted
and delivered a written notice including critical information,
including a contact number for the new owner. This does not prohibit
a lender from evicting tenants for other valid reasons, such as
interfering with the quiet enjoyment of other tenants, using a unit
for illegal purposes, or refusing to allow the lender to enter the
unit to make repairs.
For homeowners, the legislation temporarily extends the 90-day right
to cure period, enacted by the legislature in 2007, to 150 days. The
2007 law gave homeowners 90 days to come up with past due payments
on their mortgage, before the lender could require full payment of
unpaid balance. This was intended as a cooling off period for the
lender and homeowner to work out a new payment plan to avoid
foreclosure.
These new provisions require at least one meeting or telephone
conversation between the homeowner and the lender to discuss a
commercially reasonable alternative to foreclosure. The lender’s
representative must have the authority to agree to the revised
terms. The right to cure period can be reduced from 150 days to 90
days if the lender makes a good faith effort to negotiate a
commercially reasonable alternative to foreclosure.
The bill also allows the 150-day right to cure to be granted once
every 3 years; currently, the 90-day right to cure is only available
once every 5 years.
On January 1, 2016, the 150 day right to cure period, along with the
meeting requirement, will revert back to 90 days.
Additionally this new provision expands the content of the notice of
right to cure that banks must send to homeowners, and includes an
advisory for homeowners whose primary language is other than English
that the notice is an important document, and that they should have
it translated.
Further protecting homeowners, the legislation requires those who
want to obtain a reverse mortgage on their home to meet with a
counselor approved by the Executive Office of Elder Affairs.
In addition, in legislation advocated by the Attorney General, the
bill would criminalize residential mortgage fraud.
The bill also establishes a new local option property tax exemption
that permits a charitable organization that acquires a foreclosed
property, and plans to create low and moderate income affordable
housing there, to be exempt from property taxes until it rents or
leases that property, but not for more than 7 years after purchase.
Lastly, the legislation establishes a 2-year pilot program within
the Division of Banks that requires all property owners, including
lenders, trustees, and service companies, to register and maintain
vacant and/or foreclosing properties in the Commonwealth.
The bill now moves to the House for further action.
