Taking steps to address the growing foreclosure crisis within the Greater Brockton area, I voted today for H.4306, An Act Protecting and Preserving Home Ownership, legislation that would further regulate the mortgage industry and provide more resources to those residents facing foreclosure.

The passage of H.4306 complements recent legislation passed by the State Senate and comes amid announcements this week from the Governor and Attorney General that also seek to curb the skyrocketing number of foreclosures in the state. The U.S House of Representatives also passed legislation last week that would address this issue at the Federal level. Last month, the Associated Press reported that the number of foreclosure filings rose 36% nationwide from July to August this year – more than double the number of foreclosures during the same period last year.

Over the past two years and especially during the past few months, I have heard many personal and heartbreaking stories about how this problem has affected the communities I represent. I am pleased to join Governor Patrick, Attorney General Coakley, Congressman Lynch, and my colleagues in the legislature to combat this devastating problem plaguing our Commonwealth – the City of Brockton in particular – and to prevent its continued occurrence in the future.

The provisions of this legislation include:

• An increase in the current lender fee from ½% to 1% of an outstanding loan balance which encourages lenders to revise adjustable or variable rate home loans to fixed terms.
• The requirement that first-time homeowners purchasing a variable rate sub-prime loan receive in-person counseling from an approved non-profit counseling agency.
• A 90 day right to cure for borrowers of owner occupied family homes having a monetary default of a mortgage payment which stops certain fees from accumulating during the cure period.
• The requirement that loan originators be licensed in the Commonwealth.
• An appropriation of $1 million for the Division of Banks (DOB) to fund staff and implement and enforce mortgage loan originator licensure; an additional $2 million provided to the DOB for the creation of a community foreclosure and mortgage counseling pilot program to fund at least 10 foreclosure education counseling centers in impacted communities.

This legislation – if it is officially signed into law by Governor Patrick – will be very helpful to the residents of West Bridgewater, Easton, and especially Brockton. According to combined data from the U.S Census Bureau and The Warren Group, the City of Brockton has experienced the Commonwealth’s second highest rate of foreclosures. From December 2005 to June 30, 2007, there were 252 foreclosure sales, 325 foreclosure auctions, and 787 foreclosure notices reported in Brockton.

The residents of Brockton know all too well of the sub-prime lending crisis in the city. We have all seen our hardworking friends and neighbors strive to do everything to buy or keep their home, but often they have no choice but to agree to a sub-prime mortgage. The legislation we passed today gives more resources to these individuals and future homebuyers in hopes of protecting them from the deceptive and misleading tactics of sub-prime mortgage lenders.