MA Legislature passes foreclosure-aid bill

[Breeze54]

Legislature passes foreclosure-aid bill

State oversight of mortgage-lending industry increased

http://www.boston.com/business/globe/articles/2007/11/22/legislature_passes_foreclosure_aid_bill/

By Binyamin Appelbaum
Globe Staff / November 22, 2007

The Massachusetts Legislature passed a foreclosure prevention bill late Tuesday that fortifies state oversight of mortgage lending and seeks to help borrowers who fall behind on loan payments. The governor is expected to sign the measure next week. The legislation, in combination with regulations disclosed last month by the state attorney general's office, amounts to what borrower advocates describe as the nation's most stringent crackdown on the mortgage industry. The final version excluded some consumer protections that were in previous versions of the bill such as after
a foreclosure, the new owner can evict tenants even if they have leases. Also, the Legislature declined a request by Attorney General Martha Coakley to define a crime of mortgage fraud.

Lenders have foreclosed on more than 6,200 residential properties in Massachusetts so far this year, more than three times
the number during the same period last year. Many of the foreclosed owners defaulted on unaffordable subprime loans, some arranged by unregulated mortgage brokers who were paid a fee by the lender. The bill mostly aims to prevent future problems through increased regulation of mortgage originators. One of the few provisions aimed at people who already are in trouble grants borrowers who fall behind on payments 90 days to catch up before lenders can act against them. "Acting now with bold measures is critically important," House Speaker Salvatore DiMasi said in a statement.

The legislation requires brokers and lenders to pay an annual licensing fee and subjects them to supervision by the Massachusetts Division of Banks. The licensing money will finance counseling for first-time home buyers planning to take out the riskiest kinds of mortgage loans. It also creates a system for evaluating lenders. Companies would be publicly graded on the number and types of loans they make, particularly in lower-income neighborhoods. The system is modeled on the Community Reinvestment Act, a federal law that grades banks on how well they meet the needs of lower-income communities.

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[Joanne98]

1. I'm totally disgusted with the way this debate is shaping up!

We need to talk about compound interest and how profitable it is. Everybody is assuming that investors are going to take a lose but I don't see how since it's one of the most profitable scams on Earth. even if they capped the interest rates to 4 %, the investors would still make money because it's compounded. The whole lending industry needs to be reformed as far as I'm concerned.

[Breeze54]

2. This bill seems like a good step

in oversight on predatory lenders but it doesn't look like a bail out of home buyers to me.
They get 90 days to catch up, if I understand it correctly. But the mortgage lenders should
be regulated, I agree! Stop them from deceptive practices!