Anti-foreclosure activists object to language in bill awaiting Patrick’s pen

BOSTON (STATE HOUSE NEWS SERVICE) – Anti-foreclosure activists have seized on language within the foreclosure bill on Gov. Deval Patrick’s desk that they say could hamper those who have lost their homes to foreclosure from recovering the properties in lawsuits.The language says that third-party buyers will “be immune from any liability” when they buy foreclosed property even in cases where the foreclosure was improperly handled because the foreclosing entity did not hold the note for the property, according to Jason Stephany, of MassUniting, a liberal activist group. Even if the foreclosure was improper in that way, the third-party buyer would get to keep the property as long as the foreclosing entity files an affidavit that says it has complied with the law.”The affidavit could be a lie,” said Grace Ross, a former Green-Rainbow candidate for governor. “You go to court; you prove that it was a lie; you still can’t get your home back.”However, one of the drafters of the law said that the activists are fighting for a right that does not currently exist.”I don’t think Grace and their group can cite one case where the homeowner ever got their house back,” said Adam Martignetti, chief of staff to Rep. Michael Costello, a lead conferee on the conference committee that reconciled House and Senate versions of the bill. He said he had not seen a case where a person defaulted on a mortgage, lost a home in foreclosure and then successfully sued to take the house back from a third-party that had bought the home in a foreclosure auction.Eloise Lawrence, an attorney with Harvard Legal Aid Bureau, said she has seen many lawsuits that result in settlements where the original homeowner buys the home back from the third-party buyer.”There have been multiple times when we have gotten homes back for people,” Lawrence said. She acknowledged that homeowners would still have legal tools to keep their homes or encourage settlements with third-party buyers but still worries about the language in the bill.Patrick has until Sunday, Aug. 5 to sign, veto or return with amendment the legislation that reached his desk July 26 and was touted by its supporters as a powerful new tool to prevent foreclosures.The law requires lenders to assess whether they would make more money by modifying a home loan rather than foreclosing on a property. If a financial review determines that a loan modification would be more lucrative than a foreclosure for the lender, the lender would have to modify the loan, under the legislation.”The bill is going to help many, many people, but the issue of foreclosure will probably be around for many years to come,” said Sen. Anthony Petruccelli, the lead Senate conferee, shortly after the conference report was filed.Midway into the conference process, on June 22, the Supreme Judicial Court ruled in favor of Roslindale homeowner Henrietta Eaton, deciding that because the entity that collected mortgage payments did not have the underlying note, the foreclosure was improper.”I would just say that the Eaton decision was made while the conference committee was meeting and the language was included as a reaction to the Eaton decision,” Martignetti said.The inclusion of that language creates clarity and finality for people who buy homes in foreclosure and does not absolve the bank or other entity that might have improperly foreclosed, Martignetti said.