Massachusetts Lawmakers Set to Enact Foreclosure Prevention Laws

Massachusetts Governor Deval Patrick signed into law a bill intended on preventing foreclosure, placing more responsibility on lenders.

Massachusetts joins the ranks of other states such as California that have passed laws giving added protections to homeowners and guard against foreclosure abuse. Under the new Foreclosure Prevention Act, lenders will be required to produce the correct documents before they can foreclose on a home. A lender must hold the original loan note or be acting on the behalf of the original lender. They will also be required to sign an affidavit affirming that their compliance with the new rule.

Before a lender can start the foreclosure process they must offer the homeowner a mortgage modification in cases where the where a modification when the value is higher than the amount that can be recovered through foreclosure.

Mortgage modifications are an effective alternative for homeowners who qualify, but banks have been reluctant to offer this option, therefore individual states have begun making this mandatory.

House Bill 4323 also calls for a task force to study the helpfulness of mediation programs.

The Division of Banks plans to hold a public hearing outlining the rules before the new law goes into effect.

Foreclosures have a number of negative affects; they decrease the value of other homes in the community, empty homes can become blighted and attract crime. Since housing prices affect the economy on the national and state level, lawmakers have a vested interest in helping people stay in their homes.

Some homes cannot be saved, but there are many homeowners who qualify for alternatives. A foreclosure attorney will outline the troubled homeowner’s options and help them decide which measure is in their best interest.