Black and Buono Blog

...by Anthony Buono

Addressing a group of 200 real estate agents, mortgage brokers, attorneys, home inspectors, and property managers today, Attorney General Martha Coakley highlighted her proposed legislation to address the ongoing mortgage foreclosure crisis that has gripped Massachusetts.

An Act to Prevent Unnecessary and Unreasonable Foreclosures, which is sponsored by Senator Spilka and Representative Walsh, requires that creditors take reasonable steps to avoid foreclosure and prohibits foreclosures without appropriate documentation.  The legislation will also prevent additional foreclosures by mandating loan modifications in certain circumstances.  AG Coakley discussed the legislation during her keynote address at the North Shore Association of Realtors’ Annual Membership Meeting and Business Expo in Peabody.

“Our communities have been devastated by the housing crisis,” said Coakley.  “The proposed legislation will help rebuild our communities by promoting a process in which creditors and borrowers work together.  Requiring creditors to take reasonable efforts to avoid unnecessary foreclosure is in everyone’s best interest.”

The legislation targets loans generally considered to have a higher risk of default, such as interest-only loans, adjustable rate mortgages, and loans with short-term introductory interest rates.  Under the bill, creditors are required to have appropriate documentation that supports their right to foreclose prior to beginning foreclosure proceedings and are prohibited from passing on certain fees and costs associated with foreclosure to homeowners. 
The legislation makes the failure to comply with the law a violation of the Massachusetts Consumer Protection Act.

During this economic crisis, Coakley’s office has brought predatory lending cases against two major subprime lenders, Fremont Investment & Loan/Fremont General and H&R Block/Option One Mortgage Corporation.  The Attorney General’s Office has also reached settlements with investment giants Goldman Sachs and Morgan Stanley for their role in securitizing subprime loans. 

Original article by Moe Bedard