AG Coakley Highlights Proposed Legislation to Prevent Foreclosures at Meeting of Realtors
An Act to Prevent Unnecessary and Unreasonable Foreclosures, which is sponsored by Senator Karen Spilka and Representative Steven M. 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 AG 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.
Since taking office in January 2007, combating the foreclosure crisis has remained a priority of Attorney General Coakley's administration. During this economic crisis, Coakley's office has taken on Wall Street and big banks to recover more than $440 million for taxpayers and keeping more than 15,000 people in their homes. The 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. Additionally, the AG's Office has brought enforcement actions against mortgage professionals who engaged in loan application fraud and other loan origination misconduct.
An Act to Prevent Unnecessary and Unlawful Foreclosures is yet another step in Attorney General Coakley's fight to keep people in their homes and hold banks and lenders accountable. For more information about the Attorney General's foreclosure prevention efforts, please visit www.mass.gov/ago.