A bit of mortgage relief may be at hand for Massachusetts residents thanks to the efforts of the Massachusetts Division of Banks. According to a statement released earlier this month, the banks are proposing a set of regulations that will require mortgage holders to work toward alternative options to foreclosure to lower the rate of foreclosures in the state.
According to the newly proposed real estate regulations, those in the business of servicing mortgages will no longer be able to start foreclosure proceedings when an application is in the works for a loan modification by the homeowner. The new regulations will also prevent some of the more widespread abuses of the industry that occurred several years ago by requiring that creditors have the correct paperwork in place proving ownership of a mortgage before beginning foreclosure proceedings.
These new regulations are intended to work alongside the new foreclosure prevention law enacted in August to force creditors to make greater efforts to prevent foreclosure on a specified range of home loan types. These laws also require that any documents related to foreclosure be prepared and executed with personal knowledge rather than the robo-signing strategies used by loan servicers in the past.
The proposed regulations will also have an effect on third-party loan servicers. These individuals will have to follow specific loan modification procedures, communicate better with borrowers, and provide a single point of contact number to homeowners.
Foreclosure will still be a serious issue for residents of the state until the economy experiences a full recovery. The new regulations however, will give homeowners throughout the state a few new tools to work with toward preventing foreclosures and retaining possession of their homes while dealing with mortgage servicers forced into working with a new level of transparency and cooperation.
Source: Boston Herald Biz Smart, “State banks division proposes new foreclosure regulations,” Ira Kantor, Nov. 8, 2012