Massachusetts Legislature Passes Compromise Foreclosure Prevention Legislation


Yesterday, after several weeks of negotiations, the Massachusetts Legislature’s six-member conference committee on foreclosure prevention legislation filed House Bill Number 4323, “An Act Preventing Unlawful and Unnecessary Foreclosures.” The House of Representatives then unanimously passed the measure, and the Senate today accepted it 35-0. The act would take effect immediately upon signature by Governor Deval Patrick; however, the provisions that govern the foreclosure process specifically will apply to any person receiving notice of a right to cure after November 1, 2012. Legislative leaders say that with this legislation Massachusetts has taken an important step to reforming the foreclosure market by simplifying, restructuring and regulating the existing market. See prior MLS Alerts on Foreclosure Legislation here.

The compromise report develops a foreclosure process that offers more protections to the borrower. This policy goal is achieved through numerous legal requirements that must be met before a creditor can initiate foreclosure proceedings on a mortgagee’s property. One of the most significant requirements is that a lender must demonstrate a “good faith effort” or show that the creditor has “taken reasonable steps” to avoid foreclosure. This provision could be altered through a future regulatory process, but at a minimum the bill states that the lender can demonstrate this by...

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