State details proposals for foreclosure proceedings
Barbara Anthony, undersecretary of the state Office of Consumer Affairs and Business Regulation, today detailed two new proposals that would force lenders to prove they own home mortgages before starting foreclosure proceedings.
Anthony said the proposals -- one regulatory and another that would require legislation -- are meant to clear up issues highlighted by a Massachusetts Supreme Judicial Court ruling earlier this month that voided two Springfield foreclosures because the lenders could not show they owned the properties. The decision put into question the ownership of hundreds, if not thousands, of foreclosed properties in the state.
"The ownership of a mortgage should be a basic fact that is clear to a homeowner not just during foreclosure, but at any point in a loan relationship,'' Anthony said in a statement. “These proposed reforms will ensure that homeowners are not dealing with a lender with no right to pursue foreclosure, and will give potential buyers confidence they are purchasing property with a clear title"
Anthony said the state should draft regulations requiring lenders to provide proof that they own a mortgage when they notify homeowners that their homes are at risk of foreclosure because of delinquent payments.
She also proposed legislation that would require lenders to provide proof of ownership when they notify the Land Court that they sent a homeowner what is known as a "right-to-cure" notice -- a document that gives delinquent borrowers 150 days to find an alternative to foreclosure. Current law requires mortgage lenders only to submit proof that they sent the notice.
Anthony spoke at a hearing today in Brockton to discuss details of a law that took effect in the summer that extends the period that homeowners have to resolve payment issues from 90 to 150 days. Two more hearings scheduled for later this month also will address details of so-called reverse mortgages.
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