Three things MA homeowners should know about the new Foreclosure Prevention Bill

By Adetola Olatunji

Massachusetts takes the initiative to address the nationwide foreclosure crisis by passing a new foreclosure prevention bill for the state.

Earlier this month, Governor Deval Patrick signed “An Act Preventing Unlawful and Unnecessary Foreclosures”, a law that provides additional protection for homeowners and third party buyers of foreclosed properties, and addresses the controversy around suspicious foreclosure cases that have recently garnered attention in the Greater Boston area. This new law provides additional protections for homeowners that are “unparalleled in other states” according to Governor Patrick. In his statement, Patrick also went on to note that the provisions made by the bill guarantee that “borrowers will be given every reasonable opportunity to remain in their homes.”

Wondering how exactly this bill goes about making sure homeowners can remain in their homes? Here are three main aspects of the bill that Massachusetts homeowners can be excited about:

It flips normal protocol for foreclosure on its head – now loan modifications are the first option, and foreclosure as the last option.

Under this new law, creditors are required to check whether the net value of changing an existing loan might be more than what lenders can expect to recover from foreclosure. If the net value of changing a loan is found to be higher than the value of foreclosing, creditors are required to modify the loan instead. This would be huge for homeowners who have fallen behind on payments but were still making payments, as this will officially no longer a reason to be forced into foreclosure proceedings.

It establishes a rigorous checking system for lenders.

Once this law becomes effective, lenders will be required to go through a lengthy documentation process to prove ownership of the loan. The entire chain of mortgage assignments must be recorded before a foreclosure process may proceed, which helps to avoid the possibility of “robo-signers” misrepresenting the cases of individuals and families.

It doesn’t stop with a new law; it also starts the process for a new task force that will study the foreclosure issue in Massachusetts, and seek solutions.

A task force has been assigned to explore all possible methods for foreclosure mediation and promote awareness of the multiple options that homeowners have. Led by Massachusetts Attorney General Martha Coakley, the new group will include legislators, representatives of the Massachusetts Bankers Association, and three individuals to be appointed by Governor Patrick.


Overall, this new bill puts Massachusetts in an excellent position to begin the recovery process from the foreclosure crisis. Massachusetts has set the tone by making a conscious effort to keep families in this state in their homes, and hopefully other states will follow suit in the near future.

Disclaimer: These materials have been prepared by Dhar Law, LLP for informational purposes only and are not legal advice.  The material in this post is not intended to create, and receipt of it does not constitute, a lawyer-client relationship, and readers should not act upon it without seeking professional counsel.  If your home is in danger of being foreclosed on, please call (617) 880–6155 or email for more information.

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