May 17, 2012
BOSTON — The Massachusetts House passed a bill on Wednesday aimed at preventing unnecessary foreclosures by requiring loan modifications when it is in the financial interest of the borrower and the lender.
It would set standards that force banks to analyze every loan before proceeding with a foreclosure and offer a reasonable loan modification where the analysis shows that changing the loan is better for the bank than foreclosure.
Financial Services Committee chairman Rep. Michael Costello (D-Newburyport) said the bill would bring both the borrower and the lender to the table.
“We are aware of the difficulties that borrowers have had getting ahold of the bank to discuss a modification," he said. "My office spends hours and hours working with constituents trying to get someone at the other end of the phone to deal with a modification.”
And, Costello said, the bill would help people stay in their homes and stem the rise in abandoned properties.
John Skarin of the Massachusetts Bankers Association said mortgage lenders were concerned the bill could forestall legitimate foreclosure proceedings.
"Potentially, it could slow down the process in some cases," he said. "Maybe not the most efficient way to move borrowers through the process."
The anti-foreclosure measure now moves to the state Senate.
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