Legislation filed in Massachusetts would require lenders to modify home loans in certain circumstances, the Boston Business Journal reported January 27, 2009.
The legislation named, An Act to Require Commercially Reasonable Efforts to Avoid Foreclosure, was filed by Massachusetts Attorney General Martha Coakley, with Senator Susan Tucker and Representative Steven Walsh, would mandate loan modifications in certain circumstances.
Specifically, the legislation requires that creditors make "commercially reasonable efforts" to avoid foreclosure upon mortgage loans securing homes that are owner-occupied. This would apply only to loans on principal residences, and to loans with certain risky features, such as interest-only loans, adjustable rate mortgages, and loans with short-term, introductory interest rates. The legislation also provides a "safe harbor" for creditors to comply with this requirement of commercial reasonableness.
This really is an amazing piece of legislation. State government is now forcing private businesses to operate their business a certain way and mandating those business to make certain business decisions.
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