Representative Mark Falzone announced that the Massachusetts House of Representatives passed legislation aimed at protecting tenants in foreclosed properties and helping lenders and homeowners avoid foreclosure. This bill establishes protections for tenants living in properties that have been taken over by a lender after foreclosure. Under this legislation, lenders must post contact information for the lender – including an address where tenants can mail their rent – within 30 days of foreclosure. A lender cannot evict a tenant for failure to pay rent unless it has provided this notice.

In the event that a property is taken over by a lender after foreclosure, this bill stipulates that tenants can only be evicted for just cause or if the building is purchased by a third party.

Representative Falzone remarked, “In the past year, foreclosure rates across the Commonwealth have soared, devastating thousands of families. This new legislation will aid homeowners and renters to remain in their homes and increase their economic and family stability during these difficult economic times. Our communities, parents, children, and seniors all should benefit.”

The bill extends the right to cure period to 150 days from 90 days in some circumstances. This period, which allows lenders and homeowners a window to work out a new payment plan to avoid foreclosure, gives homeowners time to come up with past due payments on their mortgage before the lender can require full payment of the unpaid balance.

The bill institutes new provisions to govern interaction between a lender and homeowner during the right to cure period. Additionally, the bill allows the 150-day right to cure period to be granted once every 3 years. Currently, the 90-day right to cure period is available once every 5 years. The legislation also adds new requirements to the right to cure notice that lenders must provide to homeowners.

“This bill is a significant step toward stabilizing communities adversely impacted by the foreclosure crisis in Massachusetts,” said Representative Kevin Honan, House Chairman of the Joint Committee on Housing. “By protecting tenants and promoting negotiation between homeowners and lenders, economic hardships for many families will be avoided.”

“As folks across the Commonwealth continue to struggle to make ends meet, this bill will institute measures to help keep our residents in their homes,” House Speaker Robert A. DeLeo said. “In these uncertain fiscal times, this bill aims to provide a degree of stability to the families of Massachusetts.”

“When a property lays vacant and abandoned it is an invitation to drug addicts and vandals, and can be a general eyesore to a whole neighborhood. With this legislation, we will help keep families in their homes and take reasonable steps to hold accountable those persons that committed fraudulent acts that led to much of the turmoil homeowners are now facing,” said House Committee on Ways and Means Chairman Charles Murphy.

The bill also establishes a new local property tax exemption for charitable organizations that acquire a foreclosed property with plans to create low and moderate income affordable housing on the property. This provision would exempt the organization from property taxes until it sells or rents the property, but not for more than 7 years after the purchase.