The public, government, banks, and majority of residents have acknowledged that the foreclosure crisis has gotten out of hand in Massachusetts. In an attempt to manage the foreclosure crisis, legislation was written and a bill is now pending in the House. The bill, number is HB1219 (HD1447) for the 2011-2012 session, is primarily sponsored by Representative Steven M. Walsh (D).
Massachusetts Attorney General Martha Coakley wrote a Boston Globe opinion piece regarding the foreclosure crisis, the HomeCorps program (to be established), loan modifications, principle reduction, and the pending legislation. The article titled, “Two-part cure for unnecessary foreclosures,” is available here. Specifically, AG Coakley wrote:
“Despite agreement on these principles, loan modifications currently do not occur on the scale necessary. Our office met one homeowner in East Boston who purchased his condominium using a $147,000 loan. He lost his job and contacted the bank to request a modification that would require him to make monthly payments equivalent to a loan of $90,000. The bank refused, foreclosed on his property, and later resold that property at just $40,000, well below the value of an affordable revised loan. It made no economic sense for the bank to put this borrower out on the street. Unfortunately, his story is one of many.“