- Keep properties from becoming abandoned, thus helping maintain property values in the neighborhood, and reducing the likelihood of entire neighborhoods becoming victims of foreclosures;
- Prevent properties from being stripped of copper pipes and other valuable items, thus helping to maintain that property’s value;
- Prevent properties from becoming blights or magnets for squatters and crime;
- Temporarily house those who have lost ownership of their homes, and house tenants who rent from a foreclosed-upon owner;
- Provide lenders with monthly income while they determine whether to put the property back up for sale;
- Provide a mechanism for the eviction of tenants that makes it easier for a lender to move a property to a new owner;
- Provide an incentive for lenders who are considering foreclosure to modify those loans.
Here are the facts that support this legislation:
- Every time one house is foreclosed upon on one city block, the value of all houses on that block declines 1% and crime increases 2% –immediately;
- There have been multiple studies linking foreclosure and abandonment rates to increased violent crime statistics. One study shows that a 2.8 percent increase in foreclosures corresponds to a 6.7 percent increase in violent crime;
- The Boston Department of Neighborhood Development reports that there were 1,215 foreclosure deeds in 2008, a 73 percent increase over 2007;
- According to DND, the median residential sales price in the five neighborhoods with the highest rates of foreclosure (Dorchester, East Boston, Hyde Park, Mattapan, and Roxbury) has decreased over the last four years by between 23 and 40 percent. The residential sales prices for the rest of Boston on average remains relatively stable over that period;
- From 2008 through April 2009, Massachusetts had nearly 21,000 foreclosures, with a cumulative property value loss of nearly $3 billion, accounting for $24.5 million in lost property taxes. Because of Prop 2 ½, those property taxes don’t disappear entirely, they are simply shifted to other neighborhoods. So in Boston, residents in neighborhoods who have been impacted less directly by the foreclosure crisis are required to pay higher property taxes.
This foreclosure crisis is hitting close to home in many ways, and requires work at all levels of government. President Barack Obama is proposing assistance on the federal level. Governor Deval Patrick is looking at ways to help at the state level. Those of us at the municipal level have a responsibility to play a role in leading us out of this situation. In Boston, I believe good policies like these can help us emerge from the recession stronger than ever. Please support our efforts.
Please share widely!
Regarding “full market value rent while in the property.”
p>Many of those affected have been paying full value only w/the assistance of Section 8. Can this law accommodate that program?
p>Many foreclosing lenders fail to do upkeep. Will the renters have to pay full value then?
Question 1: “Market” rent for former tenants is defined by whatever they were paying. In the case of a former tenant with Sec. 8, the Sec. 8 contract rent would be the market rent. Right now Sec. 8 tenants’ leases are preserved by federal law after foreclosure. However, by refusing to sign a Housing Assistance Payments (HAP) contract, banks have an “angle” to evict Sec. 8 tenants because they can simply wait, in some cases, until the administering authority feels too much time has gone by without a signed HAP contract. Then the administering agency pushes them out by issuing a voucher and starting the clock. Under the home rule or state law, banks would have to accept the Sec. 8 contract.
p> Question 2: Lenders have an obligation now to keep up the premises to code, and they are subject to all obligations of any other landlord under Massachusetts law. That’s true even though they can seek to evict no-fault at the present time. If they can no longer evict no fault, they will still have that obligation, and arguably a far greater incentive.
p>Also thanks to Grace for replying to Boston Shephard below. I couldn’t have said it better. This law would save taxpayer funds, not cost more.
Why am I being asked, through the property taxes I pay, to:
p>(1) pay for housing for foreclosed home owners,
(2) pay for renters in foreclosed homes,
(3) pay “lenders with monthly income while they determine whether to put the property back up for sale,”
(4) and pay lenders “an incentive” to modify loans?
p>Especially, #’s 3 and 4 will only prolong, or worse, halt entirely, the foreclosure process. You’re paying them to not foreclose? That’s crazy, they’ll just keep not foreclosing until the program runs out, then they’ll foreclose! Is the city giving crack to addicts, too?
p>The lenders wrote these crappy loans. Let them pay for them.
p>The borrowers took out those loans. Let them find other housing.
p>If you think fraud went on, by all means start prosecuting the loan originators and the lenders.
p>You want to prevent blight? Get those houses resold. Fast. Take them by eminent domain or tax title or statute, and knock them down or resell them immediately at auction.
Congratulations to the Boston City Council, joining Worcester & Lawrence in most of these petitions –
p>Since BostonShepherd was concerned –
p>The Home Rule Petition makes the lenders who foreclosure have to accept rent instead of engaging in wholesale evictions.
p>The petition is revenue neutral for City and State, so it costs no tax payer dollars.
p>It will save public dollars presently skyrocketing to pay for ramped up code, police & fire enforcement of vacant properties.
p>It will stop the degradation of our housing stock which degrades rapidly once abandoned and paying tenants will demand needed repairs versus having sitting targets for vandalism or the ravishes of nature (unattended burst pipes, etc.)
p>It will stop the emptying of neighborhoods which accelerate loss of property values – saving property value loss of the neighbors and revenue for the city. Right now such City revenue losses will have to be made up by other property owners and renters.
p>It will start stabilizing our neighborhoods instead of our neighbors who have been and are willing to pay rents ending up displaced and more and more frequently homeless. And homelessness costs in human and real economic terms.
p>It will end the bizarre situation those of us who talk to people in foreclosed buildings hear almost every time these days: “I have tried to pay my rent, I want to stay, why won’t they take my money?”
p>I think all of us agree lenders are the ones who should pay for this economic mess – right now they are foreclosing, emptying our neighborhoods, often not paying taxes or water bills, and letting the buildings that are now their property rot. Too many of them are somewhere too far away to notice. And they made most of their money upfront…
p>Right now, we are paying in many ways – including our state economy loosing an average of 1.13 billion every two weeks that there is no significant policy change – yours, Grace Ross, Mass Alliance Against Predatory Lending
I think this is probably good policy, but I wonder whether it’s constitutional. Let’s pretend for a minute that Massachusetts were a “lien theory” state rather than a “title theory” state, just to keep the discussion simpler. So the mortgagor has a security interest–a property interst–in the house that is superior to any encumbrances the owner makes after the mortage. For example, if a homeowner sells his house to a new homeowner but doesn’t satisfy the mortgage, the mortgagee’s rights are superior to the buyers, or in other words, the bank could kick out the buyer. (This doesn’t happen in real life because the buyer can check to see whether there are mortgages on the house, and he makes sure that they are paid off at the time of the closing, but let’s pretend that the buyer foolishly failed to check on this). And if the government stepped in and said, “sorry, Countrywide, you can’t evict the buyer,” I assume that it would amount to a deprivation of the bank’s property rights. And the buyer is out of luck, because the seller could only sell him whatever he had the right to sell.
p>Aside from our greater sympathy for renters, why is the rental case any different? I’m curious whether anyone has looked into this.