Agenda Text
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That This Board Supports the Passage of S 2407; an Act to Stabilize Neighborhoods.
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Official Text
WHEREAS, The City of Somerville has witnessed a dramatic increase in property foreclosures; and
WHEREAS, Many such foreclosures are initiated by institutional lenders. When these lenders have no connections with the City of Somerville, they tend to evict tenants or former homeowners upon foreclosure; and
WHEREAS, Tenants and former homeowners affected by the foreclosures and evictions face a tight rental market, and many of them cannot afford the high moving costs. As a result, some tenants and homeowners have become homeless, and others now live in overcrowded apartments. Such foreclosures and evictions have also forced children to change schools, and displaced elderly residents; and
WHEREAS, The foreclosures and evictions have resulted in increasing numbers of vacant and abandoned homes in several neighborhoods in the City of Somerville. Vacant homes lead to crime and dangerous conditions such as squatting, gang activity, theft, arson, and vandalism. Such problems threaten the safety and stability of the community. Such problems also strain community resources that would otherwise be put to more productive use improving the general welfare of the community; and
WHEREAS, The foreclosures and evictions have depressed property values in the community and resale has become more difficult. Evictions have hindered the recovery of the property market and damaged the general welfare of the community; and
WHEREAS, The Senate Omnibus bill, an Act to Stabilize Neighborhoods (S2407), allows the evictions of tenants by a foreclosing owner only where just cause exists. Under The Act, just cause is limited to situations where the tenant fails to pay his or her rent, violates an obligation or covenant, uses the unit for crime, creates a nuisance, refuses the foreclosing owner reasonable access or refuses to execute a written extension or renewal of the tenancy. When no just cause for eviction exists, foreclosing lenders may not evict the tenants during the transitional period between foreclosure and the time when subsequent owners take over the titles. The Act aims to maintain the safety and stability in the community by minimizing evictions. The Act will also minimize the disruptive effect of evictions by making it more likely that subsequent owners will retain the current tenants; and
WHEREAS, The Senate Omnibus Bill, (S 2407) encourages lenders to meet with defaulting borrowers and engage in good faith efforts to find an alternative to foreclosure. Where lenders fail to engage in such good faith efforts, the period of time that the defaulting borrower has to cure the default without acceleration of the mortgage would be extended to 150 days from the normal 90 day period. The act would also require that lenders provide homeowners with notice of the default, notice of the right to cure, and information about how to resolve the default without foreclosure. Currently, homeowners are often unable to communicate effectively with lenders and servicers which represents a major obstacle in homeowners’ efforts to avoid foreclosure. Relevant departments and agencies have failed to respond to homeowners effectively, and have failed to provide homeowners with consistent and accurate information. This Act aims to ensure that homeowners are well informed and encourage lenders/servicers, to engage in engage in face-to-face communication with homeowners to try to avoid foreclosure; and
WHEREAS, The Senate Omnibus Bill, (S 2407) requires the commissioner of banks to establish a pilot program creating a state wide abandoned property registry. This would allow state entities to more effectively monitor vacant and foreclosing properties and promote compliance with relevant state law; and
WHEREAS, The Senate Omnibus Bill, (S 2407) imposes criminal penalties on individuals who make false statements regarding another person’s financial situation for the purpose of obtaining credit for themselves or for another person. The current foreclosure crisis was largely a result of dishonest lending practices and misrepresentations of lenders ability to pay. The Senate Omnibus Bill is intended to prevent a future crisis by creating stricter rules requiring truthfulness throughout the lending process; NOW THEREFORE BE IT
RESOLVED, That the City of Somerville supports the passage of the statewide legislation that will resolve these issues. Specifically, we support S 2407 An Act to Stabilize Neighborhoods; AND BE IT FURTHER
RESOLVED, That a copy of this resolution be sent to Senator Sal R. DiDomenico, Senator Patricia D. Jehlen, Representative Timothy J. Toomey, Jr., Representative Denise Provost, and Representative Carl M. Sciortino, Jr.