Senate Passes Bill to Protect Homeowners

We share this press release regarding action taken today on S.1981, An Act clearing titles to foreclosed properties. Senator Brownsberger supported passage of this bill in the Senate and said, “I am convinced that it is only right to give third party buyers of foreclosed properties some repose. I also believe it is good for the housing market to define a process that will remove uncertainty. Offending banks will remain fully liable to the extent they have done harm through unfair or deceptive practices.”

FOR IMMEDIATE RELEASE

September 17, 2015

Senate Passes Bill to Protect Homeowners

BOSTON – The Senate on Thursday passed legislation that works to restore the titles of foreclosed properties after thousands of foreclosure sales in Massachusetts were determined to be void as the result of state Supreme Judicial Court decisions.

The legislation provides legislative relief for Massachusetts residents who have purchased foreclosed properties or purchased homes where there were prior foreclosures in the chain of title. Currently, when these owners attempt to sell or refinance their home, they learn that their titles are void according to interpretations of the law by the state’s highest court.

 “The foreclosure crisis is still affecting thousands of residents across Massachusetts and this legislation will help remove some uncertainty for those affected by a cloudy chain of title. This bill strikes an importance balance between holding offending parties liable for deceptive practices while also protecting homeowners,” said Senate President Stan Rosenberg (D-Amherst).

“This legislation ensures that thousands of foreclosed property owners are protected under the law,” said bill sponsor Senator Michael O. Moore (D-Millbury). “The Senate has deliberatively approached a legislative response to an issue that has negatively impacted residents across our Commonwealth.”

Senator William N. Brownsberger (D-Belmont), who serves as Senate Chair of the legislative committee which released the bill, said “I am convinced that it is only right to give third party buyers of foreclosed properties some repose. I also believe it is good for the housing market to define a process that will remove uncertainty. Offending banks will remain fully liable to the extent they have done harm through unfair or deceptive practices.”

The state Supreme Judicial Court ruled that a foreclosure is void if the foreclosing lender could not produce a written assignment of its mortgage prior to the first publication of notice. If this occurred at any time in the chain of the title, the current purchaser of the property is left without a clear title as a result.

This bill allows the affidavit that is recorded during the resale of the property to serve as conclusive evidence that the foreclosing lender is in compliance unless the foreclosure has been challenged within three years of its recording. Under current law, the affidavit can be rebutted by other evidence that shows the foreclosing lender was not in compliance.

This bill provides a reasonable timeframe for those who have been improperly foreclosed on to assert their rights. The legislation also enables foreclosed homeowners to pursue actual and punitive damages against lenders who engaged in deceptive foreclosure practices.

The bill now goes before the House of Representatives for consideration.

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Will Brownsberger
State Senator
2d Suffolk and Middlesex District