The Commonwealth of Massachusetts
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PETITION OF:
The Commonwealth of Massachusetts
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PETITION OF:
Jennifer M. Callahan
Cheryl A. Coakley-Rivera
Steven J. D'Amico
James B. Eldridge
Gloria L. Fox
Elizabeth A. Malia
Paul McMurtry
James J. O'Day
Denise Provost
Carl M. Sciortino, Jr.
Frank I. Smizik
Alice K. Wolf
Byron Rushing
Barbara A. L'Italien
Benjamin Swan
James R. Miceli
Linda Dorcena Forry
William N. Brownsberger
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In the Year Two Thousand and Eight.
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An Act to establish a moratorium on and to mandate judicial review of foreclosures in the Commonwealth. |
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. WHEREAS the deferred operation of this act would tend to defeat its purpose which is to protect citizens of the Commonwealth, therefore it is hereby declared to be an emergency law necessary for the immediate protection of the public.
Notwithstanding the provisions of any general or special law to the contrary, no foreclosure sale pursuant to a power of sale in any mortgage deed of real estate located in the commonwealth, having a dwelling house with accommodations for four or less separate households and occupied in whole or in part by an obligor on the mortgage debt, shall be conducted in the commonwealth for a period of one hundred and eighty (180) days after the effective date of this section, on any mortgage note from a sub-prime lender which is presumptively unfair by virtue of having any of the following: (a) an adjustable rate loan with an introductory period of three years or less; (b) a debt-to income ratio in excess of 50 percent under the fully indexed rate; (c) the loan was approved on a “stated income” basis with no regard to a borrowers ability to repay; (d) the loan-to-value ratio is 100 percent, or the loan carries substantial pre-payment penalties or pre-payment penalties that extend beyond the introductory period; (e) interest only loans; (f) high points, fees or interest in violation of the Predatory Home Loan Practices Act, G.L. c. 183C §2.
No interest or fees shall accrue during the 180-day moratorium period. No eviction proceedings shall be initiated against tenants in any foreclosed property during the 180-day moratorium period, except if the property is sold to a bona fide purchaser or for cause originating prior to the foreclosure.
No register of deeds or assistant recorder of the land court shall accept for recording or filing for registration any foreclosure deed pursuant to a foreclosure sale conducted under a power of sale, during said 180-day period. For the purposes of this section, the term "foreclosure sale" refers to the conclusion of a sale at public auction pursuant to the provisions of chapter 244 of the General Laws.
During the 180-day moratorium period, a commission shall be established to develop and draft, with community input, legislation to be put before the legislature, mandating judicial review of all mortgage foreclosures in Massachusetts. The commission shall include representatives of the Governor, Attorney General, and Secretary of State, Treasurer, Senate President, and Speaker of the House.
During the 180-day moratorium period, mortgage holders are encouraged to work with borrowers who have any of the loan terms described above, to modify the terms of their mortgages, including, if necessary, reducing the principal, lowering the interest rate, eliminating pre-payment penalties, and other fees and costs so that qualified homeowners can obtain affordable mortgages that will allow them to stay in their homes.