REP. SANNICANDRO, HOUSE PASS BILL TO KEEP FAMILIES IN THEIR HOMES
(May 23—STATEHOUSE) Representative Tom Sannicandro (D-Ashland) joined his House colleagues last Wednesday in passing a bill that will help Massachusetts families in their homes.
The bill requires banks to analyze each loan before proceeding with foreclosure and to offer loan modification where the analysis shows modifying the loan is more beneficial for the bank than foreclosure.
“In order to keep the economy of the Commonwealth moving forward, we need to address the foreclosure crisis,” Sannicandro said. “By promoting reasonable loan modifications for both homeowners and banks, Massachusetts will be in a strong position to recover from the housing market decline and foreclosure crisis. The bill will ultimately keep people in their homes and reduce the amount of abandoned properties.”
The bill state that banks are prohibited from engaging foreclosure on a home owner unless it has taken “reasonable steps and good faith efforts to avoid foreclosure.” Under this key provision, the bank is required to offer a modified loan to the borrower if it’s more profitable than the amount the bank would recover through foreclosure. In addition, this legislation prohibits lenders from foreclosing without proper documentation, including written proof that the foreclosing party currently holds the mortgage.
“I applaud Chairman Costello and the Committee on Financial Services for their efforts in crafting this legislation,” said House Speaker Robert A. DeLeo. “This bill takes an important step to protecting homeowners from the dangers of predatory mortgages by forcing banks to converse with borrowers and evaluate the best possible solution for the family, the bank, and the community.”
“Even banks have acknowledged that it often makes more financial sense to create an affordable payment plan rather than foreclosing and selling a home at a substantial loss,” said Chairman Michael A. Costello of the Committee on Financial Services. “This bill gives us a fair and reasonable approach to do just that for more than 100,000 Massachusetts families. We can keep people in their homes without sacrificing the banks’ bottom lines, and save families and communities.”
The bill, An Act to Prevent Unlawful and Unnecessary Foreclosures was filed in January of 2011 by Attorney General Martha Coakley and co-sponsors Senator Karen Spilka (D-Ashland), and Representative Steven M. Walsh (D-Lynn).