Attorney General Peter F. Kilmartin, Senator Harold Metts, Representative Mary Messier, RIHousing officiala and municipal leaders including Acting Mayor Joseph Solomon met at at the Community Room at 500 Broad Street in Providence Monday to urge the General Assembly to preserve protections for Rhode Island homeowners facing foreclosure.
The State’s Foreclosure Mediation Act will sunset on July 1, 2018 if no action is taken. This Act ensures that homeowners struggling with their mortgage payment can have the opportunity to meet with their lender and an independent mediator to review their options with the goal of remaining in the home and not having the property foreclosed on.
Senator Metts and Representative Messier have introduced legislation (S2270/H7385) to lift the sunset, but time is running out to act on the legislation. The Senate is scheduled to vote on Wednesday on amended legislation. The House version has been held for further study.
In 2013, the General Assembly passed foreclosure mediation legislation which provided new protections to help struggling homeowners avoid foreclosure and remain in their homes. Before the law took effect, Rhode Island had one of the least restrictive foreclosure procedures in the country, according to Kilmartin’s office. Lenders were merely required to provide notice to the homeowner of their intent to initiate foreclosure, and public notice of the foreclosure in the newspaper. There was no required court involvement and no requirement that lenders meet with borrowers to explore alternatives to foreclosure.
At the time, homeowners across the State were struggling with unemployment or underemployment, and with few protections in place, many lost their homes to foreclosure. These foreclosures had a devastating impact, not only on families who lost their homes, but also on the greater community. Foreclosed properties often mean increased crime, declining property values and reduced quality of life for all residents. Preventing foreclosures is the best solution for our families and our communities.
“The Foreclosure Mediation Act was borne out of the Great Recession and the housing crisis, and it has shown to be successful in keeping many Rhode Islanders in their homes. While the economy has improved and the housing market is once again strong, Rhode Island is still 13th in the country in the percentage of loans in foreclosure. Five years ago, the impetus for the passage of this bill was the foreclosure crisis but good public policy and consumer protections shouldn’t only exist during times of crisis. Their true purpose is to help stave off crises,” said Attorney General Kilmartin.
“This program helps to level the playing field against the big banks and gives Rhode Island families a voice,” said Barbara Fields, Executive Director of RIHousing. “Since it began, this law has provided thousands of families with the chance to sit down with their bank and have their story heard. For those that take advantage of this opportunity, over 70% come to a resolution that allows them to stay in their home. We think that’s important.”
“Although the economy has significantly improved in the past few years, there are still many Rhode Islanders who are struggling to make their mortgage payments and pay for other basic life necessities,” said added Warwick Mayor Joseph Solomon. “This act offers a reasonable way forward for homeowners and financial institutions to work together to allow people to keep their homes in an affordable manner. And, I would note from a practical municipal perspective, avoiding foreclosures also helps to prevent the blight that abandoned properties can have on our neighborhoods. The City of Warwick is pleased to support these efforts to eliminate the sunset clause of the Foreclosure Mediation Act.”
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