Mass. Alliance Against Predatory Lending (MAAPL) introduces foreclosure moratorium bill

Mass. Alliance Against Predatory Lending (MAAPL)

For Immediate Release: March 24, 2008, 11:00 A.M.

Contacts: Chuck Turner: 617-635-3510

Grace Ross: 617-291-5591

Mass. Statehouse, Rm. 222

Created by eli_beckerman. Last modified on 2008-03-24 16:38:06

Foreclosure Moratorium and Other Legislation Designed To Stem Worsening Housing Crisis Offered by Legislators and Member Organizations of MAAPL

Boston, MA – At a press conference today at 11:00 AM, legislators and member organizations of MAAPL joined to announce the introduction of a strong package of legislation designed to respond to the devastating impact the current foreclosure crisis is having on homeowners, their tenants, and entire communities throughout the state. Foreclosed homeowners and dispossessed tenants testified about the crushing impact on their lives.

MAAPL is a new and growing alliance of 20-plus community organizations, already deeply involved in meeting community needs, who, together with legislators, are working to reverse the shattering impact of the situation their communities find themselves in.

Senator Dianne Wilkerson, and Representatives William Lantigua, Elizabeth Malia, and Frank Smizik, along with other legislators, are introducing the legislation.

Senator Wilkerson stated, "On a national level the focus has been on bailing out the financial institutions that created this crisis. While the Massachusetts legislature has passed legislation to try to address the foreclosure problem, it is painfully clear that it has not been enough. Whole neighborhoods are turning into ghost towns. We must do more."

In January 2008, Massachusetts had the 6th highest rate of foreclosures in the country, suffering an almost 200% increase over the number in January 2007. Almost 8,000 foreclosure petitions were filed this January alone. In 2007, 20,000 were filed during the entire year. This huge upsurge shows the unprecedented crisis, and the devastation visited upon not only individual low-income home buyers, but whole communities. Hardest hit have been communities of color in which unsophisticated borrowers were deliberately targeted by predatory sub-prime lenders.

Three legislative proposals will be filed.

(1) The first bill will put into place a 180 day moratorium on all unfair sub-prime loans. These unfair loans have certain characteristics; for example, low introductory rates that dramatically increase, interest-only loans, or loans that were approved with no regard to a borrower's ability to repay.

(2) The second bill provides protections to tenants living in foreclosed properties who are being evicted after their landlords have lost their homes through foreclosure. These tenants are current in their rent and have been good tenants; they are being forced from their homes by foreclosing banks, even though there is no one ready to move in. Recent figures show they sit empty, on average, at least 4-6 months.

(3) The third bill would grant homeowners a day in court before they lose their homes. Currently homeowners in Massachusetts can lose their homes without ever having the opportunity to contest the foreclosure – even if lenders violate the law or make errors in the amount of money actually owed. Twenty-nine states, - including Maine, Connecticut, Florida, South Carolina, Kentucky, New York & Illinois – have a judicial foreclosure process.

Len Raymond, of HOME, says that "elderly tenants are often victims of mortgage scams and lose their homes as a result, never having had the opportunity to tell their story to a judge.

Boston Councilor Chuck Turner, MAAPL member and MC of today's event, stated, "A key role, if not the key role, for government in a democracy is to assure that the interests of justice are served. Passage of this legislation is the key to achieving justice in this situation."

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Partial List of MAAPL member organizations

Association for Community Organizing for Reform Now (ACORN); Action for Boston Community Development (ABCD); Boston Tenants Coalition; City Life/Vida Urbana; Community Labor United, Dorchester People for Peace; Ensuring Stability through Action in our Community (ESAC); Fair Housing Center of Greater Boston; Greater Boston Legal Services; Green-Rainbow Party of Massachusetts; Homeowners Options For MA Elders (HOME); Mass Law Reform Institute (MLRI); Massachusetts Coalition for the Homeless; Union of Minority Neighborhoods; United for A Fair Economy