Lynn’s Walsh leads charge vs. foreclosures

LYNN – Home modification is the key to keeping families in their home, said state Rep. Steven Walsh, a major sponsor of state anti-foreclosure legislation.Walsh is leading a legislative charge to toughen up state foreclosure prevention protections with a plan to help struggling creditors while benefiting banks and other lenders.”The city of Lynn, like most urban areas, has been hit hard by foreclosures. Foreclosures should be used as a last resort, and this bill will require that banks attempt loan modification and work with families to keep them in their homes,” said Walsh.Walsh and 20 other legislators teamed up with Attorney General Martha Coakley to draft loan-modification legislation requiring creditors to take commercially reasonable efforts to avoid foreclosure on mortgage loans securing homes that are owner-occupied.This legislation would apply only to loans on principal residences, and to loans with certain risky features, such as interest-only loans, adjustable rate mortgages, and loans with short-term introductory interest rates.The legislation also provides a safe harbor for creditors to comply with this requirement of commercial reasonableness.”Meaningful loan modifications are key to keeping families in their homes, and preventing the damage that can result from abandoned properties in our neighborhoods,” Coakley said.Foreclosed, often abandoned homes are a growing problem for municipalities like Lynn and Revere where inspectors are fielding neighbors’ complaints about uncut grass and trash even as they attempt to track down banks and absentee owners.In the first half of the year, Lynn logged 144 home foreclosures with two-family homes accounting for 54 recordings with the Southern Essex Registry of Deeds.City inspectors call them “walk aways” and Lynn ordered 10 foreclosed properties boarded up in the first half of the year at a cost of $1,200 to $1,500 a home.City inspectors attempt to contact the former owner or the mortgage holder before posting the property for cleanup and sending a letter notify the bank or owner that the residence will be secured.The inspection chiefs said their challenge is to get banks and other mortgage holders to hire local contractors to secure and keep an eye on vacant foreclosed homes.The Attorney General’s Office has brought several civil enforcement actions against subprime lenders – including a lawsuit against Fremont Investment & Loan which resulted in a $10 million settlement in June 2009, and a case currently pending against Option One and its parent company, H&R Block, Inc. Coakley also implemented regulations banning foreclosure rescue schemes and barring unscrupulous mortgage broker and lender conduct in the Commonwealth.