State Level Tools For Fighting Foreclosures

May 14th, 2008

While Washington hums and haws on a vital survival issue for thousands, the state is picking up tools for fighting foreclosures. Local groups and angry citizens are vociferous and strident in their demand for the passing of three bills at the state level.

The bills are ‘Six Month Moratorium on Foreclosure’, ‘Judicial Review of Foreclosure”, ‘Just Cause Eviction’. These have been filed and waiting for hearing scheduled on 13th May.

Dianne Wilkerson, a state senator and state representative Liz Malia have sponsored ‘The Just Cause Eviction Bill’. It aims to stop the eviction of those who have had nothing to do with the foreclosure on the property – namely the tenants. They are being thrown out merely because of the whims of the landlord. Even if there are no tenants the former owners will also be saved from eviction by becoming tenants of the lenders when they lose the mortgage suit. Tenants occupying multifamily foreclosed houses will also benefit. The focus is on preventing houses from becoming vacant at any cost. It is the empty houses that are causing health and crime related problems as also bringing down the value of neighbouring houses. This bill will put pressure on the banks to be proactive and come to terms that would be beneficial not only to the two contending parties but also to the community as a whole.

Those advocating the legislation contend that the mortgage prices had been falsely increased by inflating the value of the house in question. In reality the loan amount should have been considerably less. Sometimes correct valuation will show that the amount should have been cut down by half. To remedy the matter the banks should now be willing to sell the house back to the borrower for a lower amount on reasonable terms or arrange to sell it to a non-profit body like community development organizations. If this is done then the hapless families will escape the net of foreclosure and continue to stay in the houses that have been their home.

Those pushing forward these bills claim that the foreclosure crisis is a raging reality. The state has to intervene especially now that the feds are dragging their feet. The initiative regarding the three bills have come form Massachusetts Alliance against Predatory Lending that includes tenants organization.

In Massachusetts foreclosure rate has gone up by as much as 92% according to Channel 5 Boston News.