Establishing a Massachusetts foreclosure prevention program
Impact
The proposed program modifies Chapter 244 of the Massachusetts General Laws, introducing new obligations for creditors and establishing a framework for judicial enforcement. One significant impact is the requirement that lenders must provide a comprehensive review of all available loss mitigation strategies before proceeding with foreclosure. This aims to minimize homeowner displacement and promote residential stability, making it more difficult for lenders to proceed with foreclosures without demonstrating compliance with the program. The bill is intended to lower the number of homes lost to foreclosure by facilitating better communication between borrowers and creditors.
Summary
Senate Bill S765, known as the Massachusetts Foreclosure Prevention Program, aims to establish a structured process for homeowners facing foreclosure. This legislation mandates supervised conferences where creditors and borrowers can engage in good faith discussions to explore alternatives to foreclosure, highlighting the state's commitment to supporting homeowners in distress. The bill outlines specific procedures that creditors must follow before undertaking foreclosure actions, making participation in these conferences a prerequisite for proceeding with foreclosures on covered loans. This includes the issuance of a Certificate of Compliance after a conference, which serves to ensure that all loss mitigation options have been adequately considered.
Contention
Notable points of contention may arise regarding the practicality of enforcing compliance among creditors, as well as the potential legal ramifications for non-compliance. Critics may express concerns over the administrative burden placed on creditors, fearing that increased regulation could lead to a reduction in lending capacity or make it more challenging for borrowers to secure loans. Furthermore, questions regarding the adequacy of the program's funding and its long-term sustainability may also lead to debates among legislators and stakeholders involved in housing policy.
Provides forbearance of residential mortgage foreclosures under certain circumstances; places additional requirements on attorneys, residential mortgage lenders, and courts, as part of foreclosure process.