The state representatives want to make sure "mandatory mediation" procedures are part of a bill that would govern foreclosures in the state.
Foreclosures in Somerville were somewhat down in the first six months of this year when compared to the same period in 2011.
However, foreclosures across the state were 18 percent higher.
Meanwhile, according to an announcement from State Rep. Carl Sciortino's office, the state legislature is working on an "Act to Prevent Unlawful and Unnecessary Foreclosures."
The announcement says Somerville's representatives in the Massachusetts House of Representatives support a "mandatory mediation" feature of the law that would require lenders to sit down with borrowers to work out ways to avoid foreclosure.
Below is the announcement, and to the right is a letter signed by Somerville's representatives in support of mandatory mediation:
Somerville State Representatives to Conference Committee: Time to Prevent Unlawful & Unnecessary Foreclosures
Somerville legislators joins more than 50 State House members to urge immediate action on Mandatory Mediation, transparency in foreclosure process.
BEACON HILL - Representatives Denise Provost (D - Somerville), Tim Toomey (D- Somerville/Cambridge) and Carl Sciortino (D-Somerville/Medford) called on legislative conference committee members to take immediate action to prevent unlawful and unnecessary foreclosures. In a letter signed by more than 50 colleagues [attached], Provost, Toomey and Sciortino expressed strong support for Mandatory Mediation and key transparency measures that differ between the two versions of the Act to Prevent Unlawful and Unnecessary Foreclosures. A conference committee led by Representatives Michael Costello, Carlo Basile and George Peterson, Jr. has been tasked with hammering out differences between the Senate and House bills.
As passed in the Senate version, Mandatory Mediation would require lenders, with the help of a neutral party, to work with homeowners to identify paths to avoid foreclosure - including loan modifications, short sale, refinancing or other options. Mediation proceedings would run concurrent with Massachusetts' existing Right to Cure period and will not lengthen the overall process. Associated costs, which pale in comparison to a full foreclosure proceeding, would be shared between borrowers and their financial institutions. More than 23 jurisdictions, including every New England state outside of Massachusetts, have showed significant success in keeping families in their homes and saving lenders money through Mandatory Mediation.
"These are commonsense solutions that will keep many thousands of Massachusetts families in their homes while saving lenders significant money," said Representative Sciortino. "By adopting these measures now, we can protect homeowners, raise property values and boost local economies statewide."
"Mediation prevents homelessness and reduces the number of vacant properties in our communities," said Representative Toomey. "It is incredibly important that we include new dispute resolution requirements in this bill if we are truly seeking to mitigate the impact of foreclosures on our neighborhoods."
"The time for action is now - the people of Massachusetts cannot wait another two years for protections against illegal and unnecessary foreclosures," said Representative Provost. "I sincerely hope my colleagues on the conference committee will recognize these provisions as a clear win-win for the Commonwealth."
Underscoring the need for immediate action, recent analysis has revealed that Massachusetts foreclosures have increased nearly fifty percent over the same period in 2011. Foreclosure numbers in Somerville have remained constant through May when compared to the same period in 2011. There have been 12 completed foreclosures in the city, compared to 13 through May last year, according to figures from The Warren Group, publisher of Banker & Tradesman. At the same time, the percentage of underwater mortgages has returned to the highest level since the economic crisis began in 2008. Barring significant correction, it is estimated the Commonwealth will see upwards of 10,000 unlawful and unnecessary foreclosures in the coming year - on top of 54,000 foreclosures that have already resulted from predatory lending practices.
The proposed mediation and transparency clauses build on legislation filed by Attorney General Martha Coakley last year.