Massachusetts: Galvin: No foreclosures -- Plan will ask to give homeowners day in court

[Purveyor]

With a growing number of Massachusetts homeowners facing the prospect of losing everything, Secretary of State William Galvin today will call for an immediate halt to all foreclosures in the state.

Galvin said he will propose a sweeping revamp of the state’s foreclosure process while at a State House hearing on measures to crack down on predatory lending.

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Galvin contends the current set of proposals now being discussed on Beacon Hill - including a $10 million bailout fund for distressed homeowners and the licensing of loan officers - aren’t adequate to deal with a record surge in foreclosures. Nearly 20,000 homeowners across the state faced foreclosure proceedings last year.

“We need to move in with emergency legislation,” Galvin said. “You are literally talking about tens of thousands of people in this state who I would call the pre-homeless.”

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http://business.bostonherald.com/realestateNews/view.bg?articleid=191079

[no_hypocrisy]

1. I'm wondering whether the courts will invalidate provisions of the mortgage

contract they find unconscionable, that is, so unreasonable that they must be unreasonable, such as the adjustable rate that makes it impossible to continue to pay the mortgage.

[Solo_in_MD]

4. This is good press but going to be very hard in practice for existing loans.

How do you separate sub prime loans from standard ones. Are all ARMs going to be included. How do you weed out homeowner fraud? Sometimes the buyer wants just that kind of loan since they are planning on flipping. Its not always clear cut.

What it comes down to is that if there is a contract, voluntarily signed by competent adults, legal at the time with all required disclosures, its going to be hard to for the court to legitimately set all or part aside.

The cynic in me sees a situation where the pols are doing cosmetic stuff in the press ($10M is a drop in the bucket for housing in MA) and hoping the economy and the courts will bail them out.

Sorry I can't be more positive on this one.

[NYC]

2. It's good to see action on this problem.

http://www.affil.org/

Americans for Fairness in Lending Calls on Regulators to Step Up and Rein In Rogue Practices in Subprime Mortgage Lending Industry

( March 23, 2007) Kirsten Keefe, Executive Director of Americans for Fairness in Lending (AFFIL), released the following statement in response to the crisis in subprime mortgage lending:

“Regulators can turn this crisis into an opportunity by reining in rogue practices in the subprime mortgage lending industry. The inherent design flaws in the subprime mortgages can and must be changed. Foreclosures not only have a devastating impact on families, they impact communities, lower property rates, affect tax bases, and prohibit asset-building. Predatory practices need to end immediately and solutions must be designed to help the millions of distressed Americans who have mortgages they cannot afford and are forced to sacrifice basic necessities to pay profits to lenders. Read Full Release...

[BayCityProgressive]

3. Funny

I totally support this. In Michigan, Workers World Party has been showing up at public town hall meetings with Granholm and asking her why she won't do this in Michigan..foreclosures haven't been this bad here since the depression. I sent this over to them. I hope they can embarrass her into doing it. She is really starting to get hassled about it and I am dissapointed she hasn't. She is such a panderer to big business sometimes..

[NYC]

5. Elizabeth Warren, Harvard law professor,

said the mood in Washington is changing.

She's involved with Affil.

[flashlighter]

6. Sigh, This is stupid. Did these people NOT sign the contract??

Everyone talks about how these people are being "victimized" by the lending industry. Five years ago, anyone who had taken Econ 101 would have told you that taking out a $500,000 Adjustable Rate Mortgage on the one bedroom in Southie was a foolish choice.


Are we legislating to protect people against stupid decisions now?