Foreclosure Fightback at the Statehouse

While the federal government attempts to pass inadequate relief for victims of predatory loans, local groups and outraged citizens are agitating for a trio of bills at the state level.

The three bills - "Six Month Moratorium on Foreclosure," "Judicial Review of Foreclosure," and "Just Cause Eviction" - filed and due for a hearing on Tuesday, May 13, are touted by supporters as a necessary corrective to the financial climate that caused the on-going foreclosure crisis.

The Just Cause Eviction Bill, sponsored by State Senator Dianne Wilkerson and State Representative Liz Malia, has garnered the most support. Just Cause Eviction would prevent no-fault evictions - evictions in which the tenant has done nothing wrong, such as non-payment of rent, but is evicted simply because the landlord says so. This would help keep foreclosed buildings occupied, as the former owners become tenants of the bank once they lose the mortgage. It would also help other tenants living in multifamily foreclosed buildings.

In effect, just cause eviction would induce the banks to renegotiate the sale of foreclosed buildings, because the banks don't want to be landlords and try to empty their foreclosed buildings as soon as possible.

Advocates of the legislation say that the foreclosed mortgage prices were in many cases substantially inflated, and that the notes on these buildings should be much less. Appraisals for half the amount of the mortgage are not unusual. If the banks can be persuaded to sell the property back to the former owner at a lower amount and on better terms, or sell to a non-profit like a community development corporation, people may be able to stay in the buildings that they have called home.

Supporters of the three bills argue that the foreclosure situation is a true crisis, and that state intervention is desperately needed, especially when relief from the federal government is questionable.

Foreclosure rates in Massachusetts are up 92 percent from last year, according to WCVB-TV Channel 5 Boston News.

The three bills' primary support at the Statehouse has come from the Massachusetts Alliance against Predatory Lending, a coalition of concerned groups that includes the tenant rights organization City Life/Vida Urbana.

A Boston Globe article recently described City Life's eviction blockades as the most effective antidote to the foreclosure crisis.

Dave Burt is a staff person at City Life/Vida Urbana