Massachusetts Responds to Sharp Increase in Home Foreclosures
Massachusetts home foreclosure petition filings increased dramatically in March 2012. Massachusetts Attorney General Martha Coakley and the state legislature view this trend as problematic and are taking action to respond. Attorney General Coakley proposed a measure designed to block unnecessary foreclosures, which the Massachusetts Statehouse then took up, according to Bloomberg BusinessWeek.
Foreclosures Up From Start to Finish
In March 2012, Massachusetts residential mortgage lenders filed 1,621 foreclosure petitions, a 12-month increase of more than 50 percent, according to The Boston Globe. Also on the rise were completed foreclosures resulting in foreclosure deeds, which showed a 36.5 percent increase over the previous year's total.
In response to the sharp uptick in foreclosures, the proposed legislation would require banks to analyze mortgage loans before initiating the foreclosure process. Under the proposed law, a borrower would be entitled to a reasonable loan modification, which would stop foreclosure, if it is in the financial interest of both borrower and lender.
While it is uncertain whether the bill will become law, Massachusetts homeowners who are facing foreclosure can sometimes negotiate voluntary loan modifications, which can make mortgage payments more affordable but are very difficult to obtain. Another option for stopping foreclosure - available to many indebted homeowners - is bankruptcy.
Stop Foreclosure Through Bankruptcy
Both Chapter 7 and Chapter 13 bankruptcy protection can help homeowners who have encountered financial trouble and fallen behind on their mortgage payments. As soon as a bankruptcy petition is filed with the court, an automatic stay goes into effect, putting foreclosure on hold. In Chapter 7 bankruptcy, certain debts can be wiped away, freeing up funds to meet mortgage obligations. In Chapter 13 bankruptcy, homeowners can create an affordable repayment plan that prevents the bank from foreclosing on them.
Homeowners who want to save their homes from foreclosure can find out what options are available to them by contacting a knowledgeable bankruptcy attorney who will fight for their right to keep their home.