The Massachusetts Senate and House passed a bill that will give added protections to homeowners facing foreclosure in the state and are waiting the Governor’s signature.
In light of the current foreclosure crisis which is picking up steam, many state lawmakers across the U.S. as passing laws which provide more rights to homeowners and have more stringent requirements for mortgage lenders. California recently passed the Homeowners Bill of Rights and now other states including Massachusetts are passing similar bills.
The bill was passed minus a controversial provision that would require banks to enter mediations with homeowners.
But the provisions that remain in the bill will help many people avoid foreclosure. The bill bans foreclosures when the lender is unable to produce the proper documents.
According to the bill if the cost of foreclosing on a home is greater than the cost of modifying a mortgage, the lender will be required to adjust the loan.
Lawmakers decided to drop the mediation provision because there isn’t sufficient evidence that mediation is effective in preventing foreclosure. They however established a task force to study the helpfulness of mediation.
Statewide foreclosures are up 32 percent over last year. Foreclosure petitions, the first stage in the process was up 77 percent. Preventing foreclosure is possible, but these homeowners will need sound legal advice which can be provided by a skilled foreclosure attorney.
The Massachusetts Bankers Association was opposed to the new bill, stating the bill would make it more difficult for low- and middle –income homebuyers to find mortgage loans. But the bill passed despite their objections and Massachusetts homeowners now have more rights.