Senator Spilka Votes for Foreclosure and Mortgage Fraud Protection, Silver Alert Legislation
With home foreclosures continuing to rise in the Commonwealth in spite of the improving economy, Senator Karen Spilka (D-Ashland) joined her colleagues today in sending final consumer protection legislation to the Governor that protects both homeowners and tenants from mortgage fraud and arbitrary evictions. The Senate also approved “Silver Alert” legislation designed to protect seniors stricken with Alzheimer’s.
“I am proud of this foreclosure bill, which was the result of the work of my colleagues and I, as it will help bring about relief for struggling homeowners,” stated Senator Spilka. “This initiative will help individuals as they work to stay in their homes, as well as in assisting in stabilizing the overall economy.”
“Our consumer protection legislation will help us get control of home foreclosures, which has been a major challenge during our economic recovery,” Senate President Therese Murray (D-Plymouth) said. “It protects residents and helps people stay in their homes at a time when many are already struggling.”
“This bill provides no-cost solutions that will help to stabilize neighborhoods across the Commonwealth that are hard hit by foreclosures while also ensuring that seniors fully understand the risks and benefits of reverse mortgages,” said Senator Susan Tucker (D-Andover), Senate Chairwoman of the Joint Committee on Housing.
The bill requires that tenants in foreclosed buildings can only be evicted for just cause. A lender cannot evict a tenant for failure to pay rent unless a written notice with proper contact information has been posted and delivered. It does not prohibit a lender from evicting tenants for valid reasons, such as using a unit for illegal purposes or not allowing the lender to enter the unit to make repairs.
For homeowners, the legislation temporarily extends the 90-day right-to-cure period, enacted by the legislature in 2007, to 150 days. The 2007 law gave homeowners 90 days to come up with past due payments on their mortgage before the lender could require full payment of the unpaid balance. This was intended as a cooling off period for the lender and homeowner to work out a new payment plan to avoid foreclosure.
The right-to-cure period can be reduced from 150 days to 90 days if the lender makes a good-faith effort to negotiate a commercially reasonable alternative to foreclosure.
These new provisions require at least one meeting or telephone conversation between the homeowner and the lender to discuss a commercially-reasonable alternative to foreclosure. The lender’s representative must have the authority to agree to the revised terms.
Additionally, this new provision expands the content of the notice of right-to-cure that banks must send to homeowners.
Further protecting homeowners, the legislation requires those who want to obtain a reverse mortgage on their home to meet with a counselor approved by the Executive Office of Elder Affairs.
In addition, the bill would criminalize residential mortgage fraud.
The bill also establishes a new local option property tax exemption that permits a charitable organization that acquires a foreclosed property, and plans to create low and moderate income affordable housing there, to be exempt from property taxes until it rents or leases that property, but not for more than seven years after purchase.
The foreclosure bill now goes to the Governor for his signature.
Also in today’s session, the Senate engrossed a bill, deemed ‘Silver Alert’ legislation, designed to improve efforts to find missing people with Alzheimer’s Disease or other forms of dementia.
“This bill will go a long way towards comforting the families of those suffering from Alzheimer’s or dementia by preventing the added tragedy of lost family members,” stated Senator Spilka. “Because we’re using infrstructure that is already in place for missing persons, this bill makes a lot of sense.”
The Silver Alert legislation faces final votes in the House and Senate before being sent to the Governor.