Establishing a Massachusetts foreclosure prevention program
Impact
This bill will amend Chapter 244 of the Massachusetts General Laws by adding section 35D, establishing enforced procedures for foreclosure prevention. The framework created under this bill mandates creditors to engage in good faith discussions with borrowers about potential loss mitigation options, thereby placing an obligation on creditors to substantively participate and explore alternatives before proceeding with foreclosure actions. The regulations also include strict timelines and processes for how conferences are to be conducted, aiming to streamline the resolution process.
Summary
House Bill H1090, also referred to as the Massachusetts Foreclosure Prevention Program, aims to establish a structured framework to prevent foreclosure for homeowners at risk. The bill introduces a process where borrowers can participate in supervised conferences with creditors, focusing on exploring sustainable alternatives to foreclosure. It defines 'covered loans' to include a broad range of residential properties, ensuring significant support is provided to homeowners facing financial difficulties.
Contention
Key points of contention surrounding H1090 may arise from concerns regarding its implementation, particularly regarding the burden placed on creditors. While many stakeholders advocate for such protective measures for borrowers, there are apprehensions that the bill may impose too stringent requirements on lenders, possibly leading to unintended consequences in the lending market. Furthermore, the confidentiality of conference discussions is designed to protect sensitive information, but could raise concerns about transparency in foreclosure proceedings.
Enforcement
The legislation provides mechanisms for enforcement, allowing either party to seek judicial relief if required. It also introduces a sanction system for creditors that fail to comply with participation requirements, delegating the responsibility to uphold the integrity of the process. This rigorous oversight illustrates the state's commitment to safeguarding homeowners' rights while also holding lenders accountable in the foreclosure process.
Provides forbearance of residential mortgage foreclosures under certain circumstances; places additional requirements on attorneys, residential mortgage lenders, and courts, as part of foreclosure process.