House Passes Foreclosure Legislation

FOR IMMEDIATE RELEASE

July 28, 2010

Protects Tenants, Seeks to Prevent Foreclosures

State Representative Cory Atkins (D-Concord) joined her colleagues in the Massachusetts House of Representatives yesterday in passing legislation aimed at protecting tenants in foreclosed properties and helping lenders and homeowners avoid foreclosure.

“In this economy, we need to do everything we can to help keep people in their homes,” said Atkins. “This bill helps tenants and homeowners find new ways to avert foreclosure and keep their families together.”

The bill establishes protections for tenants living in properties that have been taken over by a lender after foreclosure. Under this legislation, lenders must post their contact information – including an address where tenants can mail their rent – within 30 days of foreclosure. A lender cannot evict a tenant for failure to pay rent unless it has provided this notice.

In the event that a property is taken over by a lender after foreclosure, this bill stipulates that tenants can only be evicted for just cause or if the building is purchased by a third party.

The bill extends the right to cure period to 150 days from 90 days in some circumstances. This period, which allows lenders and homeowners a window to work out a new payment plan to avoid foreclosure, gives homeowners time to come up with past due payments on their mortgage before the lender can require full payment of the unpaid balance.

The bill institutes new provisions to govern interaction between a lender and homeowner during the right to cure period. Additionally, the bill allows the 150-day right to cure period to be granted once every 3 years. Currently, the 90-day right to cure period is available once every 5 years.

The legislation also adds new requirements to the right to cure notice that lenders must provide to homeowners.

The bill also establishes a new local property tax exemption for charitable organizations that acquire a foreclosed property with plans to create low and moderate income affordable housing on the property. This provision would exempt the organization from property taxes until it sells or rents the property, but not for more than 7 years after the purchase.

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