News & Event
The Attorney General has had to postpone the mediation press conference on the foreclosure mediation bill scheduled for Monday due to a conflict. He is pushing it back a week to Monday, May 21 at 2PM. Hopefully at the same location (500 Broad Street, Providence, in SWAP’s community room), I’ll let everyone know when there has been confirmation. I hope you will all be able to make it and spread the word! The event will focus on the short time remaining before the act sunsets (July 1) and the municipalities that are urging the General Assembly to Act.
UPDATE: The location for the Foreclosure Mediation Sunset Repeal press conference has been confirmed at 500 Broad Street (community room) in Providence (located across the street from the UHaul Rental on Broad Street.
Director of Government Relations and Policy
Rhode Island Housing
By Bob Plain on May 15, 2018
Nearly 10,000 homes went into foreclosure during the mortgage crisis in Rhode Island. Then, in 2013, the General Assembly passed the Foreclosure Reduction Act, which mandated banks to work with homeowners before repossessing property. Since then, the law helped some 600 Rhode Islanders avoid losing their homes.
But the Foreclosure Reduction Act is set to expire in July, which would leave Rhode Island as one of only 15 states in the country that wouldn’t require either a judicial or mediation process prior to a foreclosure. The other states are: New Hampshire, West Virginia, Virginia, North Carolina, Tennessee, Georgia, Alabama, Mississippi, Missouri, Minnesota, South Dakota, Nebraska, Texas, Wyoming, Montana, and Arizona.
“Were the mediation statute to sunset,” Rhode Island Housing attorney Michael Zabin told the Senate Judiciary Committee in written testimony, “we would be back to the wild, wild West that existed before the statue.”
Because Rhode Island, like about half of all states, doesn’t require a judge to decide on a foreclosure, lenders “would just mail a notice of intent to foreclose, advertise in the newspaper, and sell the house at auction,” Zabin wrote to the Committee. “Avoidable foreclosures will occur, creating a viscous cycle in which property values will go down. Vacant properties that are poorly maintained will become uninhabitable which would decrease available housing stock. Former owners and evicted tenants would crate a higher demand fot this decreased supply of housing – creating a situation in which both rents and homelessness increase.”
To avoid all this, nine legislators and Attorney General Peter Kilmartin propose nixing the sunset provision of Foreclosure Reduction Act and continuing homeowner protection law. The Senate Judiciary Committee heard the bill in March. The Senate Judiciary Committee heard the Senate bill in March. The House Finance Committee takes up the House versiontoday at around 4:30.
“It is imperative to maintain the mediation process to help those who continue to struggle and to have a working program in place when we experience another recession,” Kilmartin told RI Future. “While the economy has improved and the housing market is once again strong, the percentage of Rhode Islanders facing foreclosure today is still four times higher than pre-crisis levels.”
In testimony provided to the Senate Judiciary Committee, Kilmartin wrote, “In addition to the legal concerns above, our communities have seen throughout the housing crisis what devasting effecting foreclosures can have. Not only does the foreclosure have a distressing impact on families who lose their home, foreclosures also lead to cantant homes that may lead to public nuisances and destablilizes our neighborhoods by driving down property values. Avoiding foreclosure is in the best interests of the homeowner, the lender, and the community as a whole.”
The bills are being backed by nine cities or towns: Central Falls, Cranston, Exeter, Jamestown, Middletown, Pawtucket, Portsmouth, Providence, and Warwick. Mayors, Jorge Elorza, of Providence, James Diossa, of Central Falls, and Republican Scott Avedesian, of Warwick, submitted testimony to the Senate Judiciary Committee. So did Direct Action for Rights and Equality. (Read all written testimony here.)
“Foreclosures and related evictions continue to fetter economic recoverty, strain available housing stock, and precipitate homelessness in Rhode Island,” wrote Malchus Mills, vice president of DARE’s board of directors, to the Senate committee. “Rhode Island literally cannot afford to allow any more struggling homeowners to be forced into a poorly regulated and insufficient rental market, escpecially with housing costs rising.”
The only person to submit testimony opposing extending the Foreclosure Reduction Act was a lobbyist for the Rhode Island Bankers Association. “As the foreclosure crisis continues to wind down,” wrote Will Farrell, on behalf of the Rhode Island Bankers Association, “the achievements of the program continue to decline while the cost of the program continues to mount.”
But mediation is a small cost for some of the banks accountable to the law (local banks are exempt). Wells Fargo spends just over $100,000 a year on mediation on net income of more than $22 billion, according to a document from Rhode Island Housing, which provides mediators to homeowners facing foreclosure and is advocating for the Foreclosure Reduction Act to be extended.
“Prior to this Act, Rhode Island had one of the least restrictive foreclosure processes in the country,” Barbara Fields, executive director of Rhode Island Housing, told the Senate Judiciary Committee. “While the foreclosure rates have improved since the economic crisis, the percentage of Rhode Island homeowners who are more than 90 days delinquent on their mortgage is still 80% higher than pre-crisis rates, and Rhode Island is still 13th in the country in the percentage of loans in foreclosure. The Foreclosure Mediation Act is providing important protections for these homeowners, and should remain in place.”
Courtesy of RI Future
Published/Posted By: The Providence American
Posted: July 22, 2018
STATE HOUSE – The General Assembly today approved legislation sponsored by Sen. Harold M. Metts and Rep. Mary Duffy Messier to add five years to the life of an expiring law that keeps families in their homes and avoids foreclosure.
The bill, which the sponsors submitted on behalf of Attorney General Peter F. Kilmartin, extends a July 1 sunset provision in a 2013 law that requires mortgage lenders to initiate and participate in mediation efforts with homeowners facing foreclosure in an effort to prevent it. The bill moves the sunset provision to July 1, 2023.
The legislation (2018-S 2270A, 2018-H 7385A) now goes to the governor.
The sponsors said the law provides critical protection for homeowners, requiring their lenders to make a good-faith effort with the help of an independent mediator to try to come to an agreement to that helps save their homes from foreclosure.
“Foreclosure devastates families and neighborhoods. Mediation helps people find ways they can save their homes and all that they’ve invested in them. Rhode Island and our communities were hit very hard by the foreclosure crisis, and this act made a real difference in stemming that tide and preserving families’ homes. While I hope to see this provision made permanent, extending it for another five years will help many more Rhode Islanders avoid foreclosure, stabilizing their families and neighborhoods,” said Senator Harold M. Metts (D-Dist. 6, Providence).
According to RIHousing, which administers the program, over 70 percent of homeowners who have taken advantage of the opportunity for mediation are able to reach an agreement that allows them to stay in their home.
“This law has been a lifeline for so many families who were on the brink of losing their homes. Mediation is in the best interest of all parties, because it keeps people in their homes, paying their mortgages at a rate they can afford. The value of this law to Rhode Island, our residents and our communities has been well demonstrated, and it should be extended,” said Representative Duffy Messier (D-Dist. 62, Pawtucket).
While not all eligible homeowners participate in the mediation process, those that do are often able to remain in their home. Since the act became law in 2013, 990 homeowners have sought mediation. Of those that complete the process, approximately 50 percent resulted in homeowners receiving a loan workout from their mortgage provider, with another 24 percent ending without the mortgage provider receiving certification needed to proceed to foreclosure.
“The Foreclosure Mediation Act has proved to be successful in keeping many Rhode Islanders in their homes, and 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. The impetus for the original passage of this bill was the foreclosure crisis but good public policy — and this is good public policy — shouldn’t only exist during times of crisis. Their true purpose is to help stave off crises,” said Attorney General Kilmartin.
Before the law took effect, Rhode Island had one of the least restrictive foreclosure procedures in the country. 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. Those 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.
Washington, DC – Today, President Donald Trump signed into law Senator Sheldon Whitehouse’s (D-RI) bill to extend vital foreclosure protection to servicemembers, veterans, and their families. Whitehouse’s legislation, which was included as an amendment in the 2018 defense authorization bill, extends through 2019 the one-year grace period protecting servicemembers leaving active duty from foreclosure.
“The men and women of our armed forces ought to have a shot to regain their financial footing when they return home,” said Whitehouse. “Extending this important protection recognizes their noble service to our country. I’m proud my legislation was signed into law today.”
Senator Whitehouse has been fighting for years to ensure that those who have served our country and their families are protected from foreclosure as they transition from active-duty service to civilian life. In 2012, Whitehouse fought successfully to extend the period of foreclosure protection to one year. Since then, Whitehouse has succeeded in continuing that protection on a temporary basis, while fighting to make it permanent. The 2016 extension of these protections expires at the end of 2017.
“Senator Whitehouse’s bill is particularly important in Rhode Island because we have one of the most deployed National Guard forces in the country,” said Erik Wallin, Executive Director of Operation Stand Down Rhode Island. “This bill provides servicemen and women with the relief they need as they transition from periods of active duty back into civilian life.”
In 2008, Congress first extended the period of foreclosure protection under the Servicemembers Civil Relief Act from 90 days to nine months in response to a report by the Commission on the National Guard and Reserves. The report found that “the threat of foreclosure is a stressor that need not be placed on members of the armed forces during the first months of their return to civilian life.”
(Providence, RI) -- The state Senate is approving legislation to add five years to the life of an expiring law that affects homeowners facing foreclosure. The bill, sponsored by Senator Harold Metts, extends a July 1st sunset provision in a 2013 law requiring mortgage lenders to offer mediation to those homeowners in an effort to prevent it. The action on Wednesday comes just two days after Attorney General Peter Kilmartin held a press conference urging lawmakers to pass the extension. The legislation moves to the House, where there is a companion bill.
Courtesy of News Radio
Courtesy of The NK Standard Times
These changes could help offset the impact of the lowered corporate tax rate from 35% to 21%, which effectively reduces the value of Housing Credits to corporate investors. Some experts estimate that the lowered corporate tax rate will significantly reduce investor demand for the Housing Credit and could result in 20,000 fewer homes being built under the program annually.
Courtesy of NLIHC
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