BOSTON — Massachusetts bank regulators are preparing to issue rules to enforce a new law that seeks to prevent home foreclosures by forcing mortgage lenders to offer modifications on certain “risky” loans.
Gov. Deval Patrick signed the bill early this month, creating consumer protections, and ensuring that mortgage borrowers are given every chance to stay in their homes.
It requires lenders to assess a borrower’s circumstances and determine whether the net value in changing an existing loan is more than the anticipated recovery from foreclosure. If so, the lender is required to offer a loan modification to the borrower.
It also prohibits lenders from foreclosing on properties without proper documentation and includes provisions to create a task force to study mediation programs.
The Division of Banks will hold a public information hearing Wednesday in Boston before issuing new rules.