S2407 An Act to Stabilize Neighborhoods
August 19th, 2010
Massachusetts Governor Deval Patrick recently signed into law S2407 An Act to Stabilize Neighborhoods.
On 8/7/2010, Massachusetts Governor Deval Patrick recently signed into law, S. 2407 An Act to Stabilize Neighborhoods. The enacted bill was modified in last minute negotiations within the House Ways and Means Committee, which substituted the text of Massachusetts H. 4934 for the text of S. 2407. The result was essentially the same bill, minus the vacant property sections, which were deleted and are excerpted below the summary in bold.
This law creates additional tools to stabilize property values, prevent foreclosures, and mitigate the impacts when foreclosures are necessary. The enacted bill:
1) Provides extensive eviction protections to tenants in foreclosed properties who are in good standing and continue to pay rent and is more restrictive than the federal Tenant Protection Act. This section is effective November 7, 2010. It provides a detailed description of just cause, prohibits a foreclosing owner from evicting a tenant without "just cause" or or unless the foreclosing owner has executed a binding purchase and sale agreement with a bona fide third party to purchase the property; requires the foreclosing owner to post a written notice in a prominent location that contains the names, addresses, telephone numbers and telephone contact information of the foreclosing owner, building manager or any other representative of the foreclosing owner responsible for managing the building, plus the address to which rent or use and occupancy charges must be sent. Fines of no less than $5000 per illegal eviction may be imposed for violations of this law or any ordinance enacted pursuant to it.
2) Establishes a framework for negotiations between lenders and homeowners to work together to create a mutually-acceptable loan modification. Participating in loan modification negotiations would be voluntary but lenders that do not participate will have to wait 150 days to foreclose on the property (up from current 90 day right to cure). This provision sunsets in 2016.
3) Encourages redevelopment of foreclosed properties by providing a local option to exclude nonprofits from property taxes during the term that the nonprofit rehabilitates the home and converts it into affordable housing.
4) Criminalizes mortgage fraud. The law is effective November 7, 2010.
6) Provides additional protections for consumers within certain income guidelines considering reverse mortgages, and requires counseling in order to receive a reverse mortgage. A reverse mortgage is where a senior homeowner receives a loan on their home equity and the loan is paid back when the homeowner sell the home or passes away. Most portions are effective next February. The required counseling will not be effective until the end of 2012
Deleted previous Sections 12 and 13 Re MAP:
SECTION 12. Notwithstanding any general or special law to the contrary, the 512 commissioner of banks shall establish a 2 year pilot program to implement a state Massachusetts abandoned property registry, hereinafter referred to as MAP. Such registry shall require all property owners, including lenders, trustees and services companies, to properly register and maintain vacant or foreclosing properties located in the commonwealth. Law enforcement entities including, but not limited to, the attorney general and municipalities shall have access to the MAP. The commissioner of banks shall have enforcement authority of the pilot program including, but not limited to, the authority to impose civil assessments. Said commissioner shall adopt rules and regulations governing the implementation and administration of the MAP pilot program.
SECTION 13. The commissioner of banks shall adopt the rules and regulations required under section 12 not later than 120 days after the effective date of this act.
To view an article from the Boston Globe that discusses S2407, please click here
To view S2407 in its entirety, please click here
About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with approximately 800 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.