Establishing a Massachusetts foreclosure prevention program
Impact
The proposed bill has significant implications for existing state laws related to foreclosure procedures. By mandating a foreclosure prevention program, S653 modifies Chapter 244 of the Massachusetts General Laws to incorporate provisions that protect homeowners by requiring lenders to engage in loss mitigation efforts before proceeding with foreclosure actions. This change is designed to ensure that homeowners are made aware of their options and have the opportunity to pursue alternatives such as modified loans or payment plans. Participation in the program is to be documented with a 'Certificate of Compliance', which creditors must obtain prior to foreclosure, providing an added layer of protection for homeowners.
Summary
Bill S653, titled 'An Act establishing a Massachusetts foreclosure prevention program', aims to create a structured program to help homeowners avoid foreclosure through supervised conferences. These conferences require both borrowers and creditors to participate in good faith efforts to explore alternatives to foreclosure. The program is intended to facilitate communication and negotiation between homeowners at risk of losing their homes and the lenders who hold their mortgages. By emphasizing a collaborative approach, the bill seeks to reduce the number of foreclosures in Massachusetts, particularly during economic hardships that may put homeowners at risk.
Contention
While the bill is presented as a helpful measure for homeowners, it may also face criticism from creditors, who might argue that mandated participation could complicate and prolong the foreclosure process. Some lenders may express concerns about the resources required to participate effectively in the conferences, especially if they are unprepared for the level of negotiation the program demands. Critics of the bill might also argue that it could create delays in the recovery of their investments, particularly in scenarios where timely foreclosure could prevent further losses. However, proponents highlight the potential for reducing overall foreclosure rates and supporting community stability as key benefits.
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Order relative to authorizing the joint committee on Financial Services to make an investigation and study of certain current Senate documents relative to financial services matters.
Provides forbearance of residential mortgage foreclosures under certain circumstances; places additional requirements on attorneys, residential mortgage lenders, and courts, as part of foreclosure process.