Governor: Criminalize foreclosure fraud
Governor Deval Patrick, reacting to record numbers of people losing their homes, called today for the criminalization of foreclosure fraud, better tracking of foreclosures, and a public education campaign for would-be homeowners.
‘‘It is vital that we have an effective and immediate action plan in place to help homeowners facing foreclosures,’’ Patrick said. ‘‘Addressing this problem requires a comprehensive approach.’’
Patrick said Massachusetts needs to provide better information for consumers before they seek a mortgage. It also needs to create tougher regulatory controls over brokers and lenders, offer legal help for homeowners facing foreclosure, and crack down on those who engage in mortgage fraud, he said.
Last year, there were a record 19,487 foreclosure filings in Massachusetts.
Patrick’s crackdown would include legislation to make mortgage fraud a criminal offense and prohibit abusive foreclosure rescue schemes.
It also would require that before any foreclosure can go through, a mandatory ‘‘pre-foreclosure notice’’ must be filed with the state. The plan would also establish a central repository of foreclosure notices at the Division of Banks to better track foreclosure trends.
Other highlights of the plan:
* Tightening licensing and education requirements for mortgage lenders and brokers to eliminate disreputable firms and practices.
* Helping those facing a possible foreclosure with a new hot line and referrals to reputable foreclosure counselors and lenders willing to assist.
*Raising licensing and examination fees for licensed mortgage lenders and brokers to increase enforcement capabilities and create a mortgage fraud unit.
* Increasing the net worth and bonding requirements for licensed mortgage lenders and brokers to ensure that companies with a limited financial stake cannot get a license to do business in the state.
Attorney General Martha Coakley and Secretary of State William Galvin have also proposed cracking down on subprime mortgage lenders who cater to consumers with poor credit ratings.
(AP)
