Safeguard Properties

Florida Supreme Court Adopts Concurrent Cause Doctrine For Property Damage Claims With Multiple Causes

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Industry Update
January 2, 2017

Case: Sebo v. American Home Assurance Co., Inc.
Florida Supreme Court
No. SC14-897, 2016 Fla. LEXIS 2596 (Dec. 1, 2016)

In a long-awaited decision, the Florida Supreme Court in Sebo v. American Home Assurance Co., Inc., resolved a conflict among Florida courts of appeal by applying the concurrent cause doctrine to determine that coverage may be afforded under an all-risk property insurance policy where independent perils converge, and no single cause can be considered the sole or proximate cause.

Sebo involved a multimillion dollar residence in Naples, Florida, which sustained water intrusion during rainstorms as a result of major design and construction defects. The property was further damaged as a result of Hurricane Wilma in October 2005. After the insurer refused to cover the water intrusion damages based on the policy’s exclusion for faulty, inadequate, or defective planning, the insured homeowner filed suit against various entities involved in the sale and construction of the property, and added the insurer as a defendant in order to obtain a declaration that coverage was available under its all-risk property insurance policy. Siding with the insured, the trial court relied on the concurrent cause doctrine previously adopted in Wallach v. Rosenberg, 527 So. 2d 1386 (Fla. 3d DCA 1988), to find that coverage was available because one of the concurrent causes of the loss, i.e., damage resulting from rainwater and hurricane winds, was covered under the policy. On appeal, however, the Second District Court of Appeal reversed and remanded for a new trial, asserting that the trial court should have instead applied the efficient proximate cause theory pursuant to which coverage may be denied where the “efficient” or primary cause that sets the other concurrent causes in motion, i.e., faulty construction, is itself excluded. See American Home Assurance Co. v. Sebo, 141 So. 3d 195 (Fla. 2d DCA 2013).

Determining that the concurrent cause doctrine—rather than efficient proximate cause—provided the appropriate method by which to evaluate the insured’s claim, the Florida Supreme Court in Sebo quashed the appeals court decision and effectively ended the ongoing dispute between Florida’s Second and Third District Courts of Appeal in favor of the latter. The Court summarized that where covered rainwater and hurricane winds combined with non-covered defective construction to cause damage and “there is no reasonable way to distinguish the proximate cause of . . . property loss. . . . it would not be feasible to apply the [efficient proximate cause] doctrine because no efficient cause can be determined.” Sebo, 2016 Fla. LEXIS 2596, at *14.

Although Sebo will certainly inject some needed clarity into the determination of whether coverage is available for property damage resulting from multiple concurrent causes, it should be emphasized that this decision reinforces the pre-2013 status quo under Wallach, pursuant to which coverage may exist where an insured risk constitutes a concurrent cause of loss, even when it is not the prime or efficient cause.

Source: Mondaq

Florida Bill Would Expand Lienholders? Rights

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Legislation Update
January 24, 2017

A bill has been introduced in the Florida State Senate that would give lienholders more rights in the case of a residential foreclosure.

Florida H.B. 471, proposed by State Senator Jay Fant, a former Chairman and CEO with First Guaranty Bank & Trust Company, “Authorizes certain lienholders to use certain documents as admission in action to foreclose mortgage; provides that submission of certain documents in foreclosure action creates certain presumptions; authorizes lienholder to make request for judicial notice,” according to the language of the bill.

The bill authorizes a lienholder to use any documents from the mortgagee’s bankruptcy case that indicates an intention by the defendant to surrender the property. If the defendant does not withdraw the document in question, that document submitted along with a bankruptcy discharge, “creates a rebuttable presumption that the defendant has: 1. Surrendered to the lienholder the defendant’s interest in the mortgaged property; and 2. Waived any defenses to the foreclosure.”

The defendant’s legal recourse in such a case includes “raising a defense based upon the lienholder’s conduct subsequent to the filing of the document filed in the bankruptcy case that evidenced the defendant’s intention to surrender the mortgaged property to the lienholder.”

The bill was filed with the House in Florida on Tuesday, January 24, and would go into effect on July 1, 2017, if it passes.

Morgan Weinstein, Attorney with Florida-based Van Ness Law Firm, said the language of the H.B. 471 may prove to be problematic.

“The statute, in combination with the Failla decision (Failla v. Citibank in the 11th Circuit Court of Appeals, 2016) and what will subsequent be state decisions on that issue will make it so that the plaintiff can use the request for judicial notice pursuant to the statute in order to prevent the defendant from either attempting to deny the plaintiff’s claim or engage with an affirmative defense,” Weinstein said. “If the drafters of the statute wanted the defendants to be able to continue to assert denial, it would have said ‘affirmative defense’ rather than “defense.’ The wording of the statute does not track the language of the 11th Circuit opinion, and that could lead to litigation.”

Florida was one of the states hit hardest by the foreclosure crisis, though the rate at which foreclosures are being completed has declined substantially over the last few years. For the 12-month period ending November 30, 2016, there were approximately 48,000 residential foreclosures completed in Florida, compared with 83,000 for the 12-month period ending November 30, 2015, according to data from CoreLogic.

Click here to view the full text of Florida H.B. 471.

Source: DS News

First Responders Getting Past the Plywood

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Industry Update
January 31, 2017

The property preservation industry’s age-old standard for securing windows on vacant residential homes, plywood, has come under heavy scrutiny in the last couple of years due to issues that can arise when a plywood-secured property sits vacant for any period of time—squatters, vandalism, community blight, and violent crime.

The industry has taken various measures to combat these issues—for instance, in November 2016 Fannie Mae announced that all of its residential properties in pre-foreclosure would be required to use an alternative to plywood to secure the homes.

These issues affect more than those in the mortgage industry and in the community where the vacant properties are located, however. First responders are aware that anytime they are called to a vacant property, there might be danger lurking inside—and that the vacant property might not be truly vacant.

The Seattle Fire Department has concerns when responding to structures that have been physically modified, as it creates very dangerous and hazardous situations for our firefighters,” Seattle Fire Chief Harold Scoggins said. “It is such a significant problem that we have created standard operating guidelines for derelict buildings to try and ensure the safety of our firefighters when responding to these types of buildings. In the vacant or abandoned buildings alone this year, SFD has seen 16 fires in these kinds of structures.”

In an area such as Miami, is hurricane-prone, homeowners sometimes board their windows up through hurricane season.

“Any time we encounter a situation where there are boards on the windows, we never look at those properties as unoccupied. We never do that,” said Captain Bill Gustin of Miami-Dade Fire Rescue.

When he is called to a property and there are boards on the windows, Gustin said the procedure is to look for extension cords running from the property to the home next door, where squatters may be borrowing electricity.

“Several times I’ve cut the wood and seen people who are in there jump up and run out of there like a scared rabbit,” Gustin said.

As they do with any situation, first responders are careful to consider safety first when entering a boarded-up house.

“The first thing we need to do is make sure the scene is safe,” said Capt. Joseph Amador, Fire Captain with the San Diego Fire Department and Public Information Officer. “If the house is boarded up, or something like that, and I don’t think that it’s safe for my firefighters or EMTs to enter, then we will not enter. We’ll call for the police department to come and give us a backup and maybe clear the area for us to come on in.”

An unexpected situation could cause a change in plans for first responders, Amador said.

“We’re there with the intention to help someone who has called for assistance, and we’re unable to reach that patient because someone is there to cause us harm or someone is standing in our way, obviously we don’t want that to happen,” he said. “With that in mind, we’ll call for assistance or back out.”

If there is a fire inside a boarded-up structure, the home loses ventilation over time and causes the fire to slowly die. When firefighters enter a home with limited ventilation and a fire is smoldering inside, the sudden influx of oxygen on the embers could cause the house to quickly become “a roman candle,” Gustin said.

“One of the issues is going to be ventilating the structure,” said Lt. Steven Lawrence, Deputy Fire Marshal and Public Information Officer with the St. Petersburg (Florida) Fire Department. “If we have an active fire inside, firefighter safety is our concern. Not only is our safety a concern, but being able to get the superheated gases and smoke out of the structure are going to be a priority for us to deal with. The other thing with the boarded-up structure is, you don’t know what type of condition the interior is in. A lot of times in our area, vagrants will get into the property and demolish it or steal the wiring out of the property. You never know what you’re going into when it’s a vacant structure, especially when it’s boarded up. Our biggest concern is what are we getting into and how easily could we get our people out in an emergency situation.”

The issues brought on by using plywood to board up vacant homes have prompted some innovators to create alternatives to plywood (such as polycarbonate clearboarding and steel) that do not create the same concerns as plywood.

“Those houses are used frequently by squatters, sometimes as drug houses to sell drugs out of, or drugs houses to use drugs in,” said Mike Taylor, State Secretary and Legislative Chairman with the Fraternal Order of Police of Ohio. “So you have that direct law enforcement problem of a vacant and abandoned property to begin with. With plywood on the windows, vacant and abandoned properties are easily identified. You get sent on dispatch runs or calls there for a suspicious person or possible drug dealer, and you arrive at the property, and you can’t do any type of short-term surveillance where you can look in the windows and see what may or may not be in there or may or may not be going on. If you have a view through the windows through some sort of substance other than plywood, it’s a huge advantage, not just for police but for fire that gets sent on those runs, so you can at least look inside before you approach or try and gain entrance to the property.”

Ultimately, houses boarded up by plywood can adversely affect the entire community, according to Taylor.

“It brings a whole different character to the neighborhood, and with that brings other types of crimes that may or may not actually be occurring inside the vacant property,” Taylor said. “Because of the blight it brings on the neighborhood, it lowers the standards of the neighborhood, at least within a block or so, can bring its own set of problems beyond what may or may not be going on inside the vacant property.”

In January 2017, a white paper written by former U.S. Treasury Department Deputy Assistant Secretary for Economic Policy Aaron Klein titled Understanding the True Costs of Abandoned Properties: How Maintenance Can Make a Difference estimated that one year of vacancy for one property causes around $150,000 in damages. That same month, Ohio became the first state to ban the use of plywood on vacant properties.

“Plywood is an outdated solution to a growing modern-day problem,” said Robert Klein, Chairman and Founder of Ohio-based Community Blight Solutions (no relation to Aaron Klein). “We need to apply 21st century solutions to reverse the trends that are decimating our neighborhoods. It is my hope that other states will follow Ohio’s leadership and enact similar legislation.”

In recent years, polycarbonate clearboarding has become a popular alternative to plywood for securing windows in vacant homes. Fannie Mae began using clearboarding to secure vacant homes in REO properties in 2013 and went nationwide with it starting in early 2014. But using it in the pre-foreclosure process began recently with the announcement of the new allowable in early November.

“The use of clearboarding gives off the appearance of a normal window, so the curb appeal is much higher on a clearboarded property versus plywood boarded,” said Jake Williamson, VP, Real Estate Fulfillment & Operational Analysis at Fannie Mae. “The first thing is the curb appeal. (Polycarbonate) does give off the perspective that it’s just a normal home in a market where you’re trying to compete with non-distressed sales, that it’s just a normal home. The second thing is, it’s an incredibly secure product. You can literally throw a cinder block at it and it’s not going to shatter or crack.”

Source: DS News

Additional Resource:

DS News (The Cost of Fighting Community Blight)

Connecticut Looks to Address Crumbling Foundations

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Legislation Update
January 31, 2017

Proposed Legislation

Additional Resources:

Department of Consumer Protection/Connecticut Attorney General

Department of Consumer Protection (webpage)
Department of Consumer Protection (Report on Deteriorating Concrete in Residential Foundations)
Office of Attorney General George Jepsen (Consumer Protection Investigation of Crumbling Home Foundations)

Media Articles

NY Times (With Connecticut Foundations Crumbling, ‘Your Home Is Now Worthless’)
NY Times (Financial Relief Eludes Connecticut Homeowners With Crumbling Foundations)
NBC (NBC Connecticut Troubleshooters Investigates Crumbling Foundations)
Hartford Courant (State (Foundations Are Failing At Least In Part Because Of Mineral Pyrrhotite)

CDN Releases Vacant, Blighted, Abandoned Properties Study

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Industry Update
January 18, 2017

CDN, in cooperation with the Maryland Municipal League and the Maryland Association of Counties, conducted a survey of counties and municipalities to try to get a handle on Maryland’s challenges with vacant, abandoned and blighted properties.

The results of the study were released January 17, 2017 during a briefing before the House Environment and Transportation Committee.

See the report here: CDN_policy_vacant property survey results_final_designed_Jan2017

As a result of the survey, and conversations in working groups over the summer, CDN is proposing four pieces of legislation to address vacant, blighted and abandoned properties:

Land Bank Reform: This legislation makes changes to the current Land Bank law enabling counties to create Land Banks for blight elimination purposes. The legislation includes enabling counties to release liens and for the Land Bank to self-fund.

Foreclosed Property Registry changes: This legislation adds a requirement that banks must file with the Department of Labor, Licensing and Regulation notice of foreclose at the Order to Docket stage of the foreclosure, rather than at the end of the foreclosure process.

Definition of vacant and abandoned property: Legislation that defines “vacant and abandoned” property and provides for a certification of a vacant property.

Tax Sale Reform: This enabling legislation reforms the tax sale system to eliminate the certificate process to reduce the number of families who become victims of tax sale and help ensure properties are returned to productive use (this may become a summer study).

To see CDN’s full policy agenda, click here. CDN_Policy Agenda_proposed January 2017

Source: CDN

Non-banks May Quickly Be Dominating the Servicing Industry

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Industry Update
December 20, 2016

It seems the torch is being passing in the U.S. mortgage servicing industry as portfolios among smaller companies quickly increase, according to Fitch’s latest quarterly U.S. RMBS Servicer Handbook and US RMBS Servicer Roundtable Takeaways.

Fitch says that portfolios among special servicers with loan counts less than 400,000 are increasing quicker than the servicing industry as a whole with an average year-over-year growth of almost 20 percent. This is compared to the weighted average portfolio growth for all Fitch-rated servicers (approximately 2 percent).

“While special servicers continue to maintain robust capabilities in handling distressed loans, many have expanded into performing servicing in order offset portfolio runoff. Primary serviced loans increased by 52 percent on average across their portfolios,” adds the report. “This trend is in line with takeaways from Fitch’s recent U.S. RMBS Servicer Roundtable event, in which many servicing executives noted that non-bank special servicers could seek out new origination volume to offset declining delinquent loan volume.”

Further, Fitch reports that according to industry experts during a recent U.S. RMBS servicer roundtable responsibility for servicing loans will rest more with non-banks, with the overwhelming consensus of 89 percent of panelists agreeing that nonbank servicers will continue to take market share from banks in 2017.

“Whereas MSR sales and subservicing had in the past driven servicing growth among non-banks, future activity will be driven by new loan origination activity by competitive non-banks who also service loans,” says Managing Director Roelof Slump. “Servicing sales from banks who want to reduce the associated regulatory impact on capital will also drive growth.”

Increased regulation has become a significant operational burden across the industry and has driven servicing costs higher, according to Fitch, but the report adds that most roundtable attendees believe that regulation has led to improved servicing quality.

“Regulation has made servicing transfers cleaner due to better data quality on in-flight loan modifications and loss mitigation efforts already undertaken by the prior servicer,” says Slump.

Source: DS News

Nevada Servicemember Foreclosure Bill Introduced in Senate

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Updated 4/18/17: S.B. 33 passed the Senate and has been sent to the Assembly.

Link to Legislature

Updated 4/5/17: On March 16, S.B. 33 was amended and passed by the Senate Judiciary Committee.

Link to Legislature *Current amended text not yet available.

Legislation Update
December 1, 2016

Legislative Counsel’s Digest:
The federal Servicemembers Civil Relief Act, 50 U.S.C. § 3901 et seq., generally provides for the temporary suspension of certain judicial and administrative proceedings and transactions that could adversely affect the civil rights of a servicemember during his or her military service. (50 U.S.C. § 3902)The Act provides that in any action filed during, or within 1 year after, a servicemember’s period of military service to enforce an obligation on real or personal property owned by a servicemember that: (1) originated before the period of such military service and for which the servicemember is still obligated; and (2) is secured by a mortgage, trust deed or other security in the nature of a mortgage, a court is generally authorized or required, depending on the circumstances, to stay the proceedings or adjust the obligation to preserve the interests of all parties. The Act further provides that absent a court order or agreement, a sale, foreclosure or seizure of property for a breach of any such obligation is not valid if it is made during or within 1 year after the period of the servicemember’s military service. Any person who knowingly makes or causes to be made a sale, foreclosure or seizure of property in violation of such a provision, or knowingly attempts to do so, is guilty of a misdemeanor. (50 U.S.C. § 3953) Additionally, the Act provides that upon application to a court, a dependent of a servicemember is entitled to the protections offered to a servicemember if the ability of the dependent to comply with certain obligations is materially affected by the servicemember’s military service. (50 U.S.C. § 3959)

The provisions of the Act that grant protection from a sale, foreclosure or seizure of property for a period of 1 year after a servicemember’s military service currently remain effective until December 31, 2017, and on January 1, 2018, the period of protection will decrease to 90 days. (Section 710(d) of the Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012, Public Law 112-154, 126 Stat. 1208; section 2 of the Foreclosure Relief and Extension for Servicemembers Act of 2015, Public Law 114-142, 130 Stat. 326)

This bill grants under Nevada law the period of protection currently provided under federal law. Section 1 of this bill provides that if a mortgagor or grantor of a deed of trust under a residential mortgage loan is a servicemember or, in certain circumstances, a dependent of a servicemember, a person is prohibited from  conducting a foreclosure sale during any period the servicemember is on active duty or deployment or for a period of 1 year immediately following the end of such active duty or deployment. Section 1 also provides that in any civil action for a  foreclosure sale that is filed against a servicemember or, if applicable, a dependent  of a servicemember while the servicemember is on active duty or deployment or  during the 1-year period immediately following the end of such active duty or  deployment, the court is authorized or required, depending on the circumstances, to  stay the proceedings in the action for a certain period or issue an order that  conserves the interests of the parties unless the court determines that the ability of the servicemember or dependent to comply with the terms of the obligation secured  by the residential mortgage loan is not materially affected by the servicemember’s  active duty or deployment. Section 1 further provides that any such protection  against foreclosure only applies to a residential mortgage loan that was secured  before the servicemember was called to active duty or deployment. Finally, section 1 provides that any person who knowingly conducts a foreclosure sale in violation of the provisions of section 1 is guilty of a misdemeanor and is liable for actual  damages, reasonable attorney’s fees and costs incurred by the injured party.

Source: Nevada Legislature (information and full text)

National Solutions on a State Level

Posted on by Safeguard

Updated 1/5/17: DS News published an article titled Ohio Governor Signs Plywood Ban Into Law.

Link to article

Additional Resources:

Office of Governor John R. Kasich (Kasich Signs Twenty-Eight Bills)

Link to press release

PR Newswire/Community Blight Solutions (Ohio Becomes First State to Ban Plywood Boarding on Vacant and Abandoned Properties)

Link to press release

Legislation Update
December 13, 2016

The property preservation industry has taken another huge step toward reducing community blight with the passage of Ohio H.B. 463 in the Ohio State Senate.

The bill, which would ban the use of plywood in securing vacant and abandoned properties, passed by a count of 26 to 5 in the Ohio Senate on December 8 after receiving a nearly unanimous favorable vote (95 to 1) in the Ohio House of Representatives on May 11. The bill now needs only the signature of Ohio Governor John Kasich to become law, after which it will take effect in 90 days.

Division (A) of Section 2308.031 of Ohio H.B. 463 states, “No person shall use plywood to secure real property that is deemed vacant and abandoned under section 2308.02 of the Revised Code.”

Vacant and abandoned properties that contain windows boarded with plywood have often been found to attract vandalism, squatters, and in some cases, violent crime, in addition to contributing to the spread of blight. Stakeholders both in the property preservation industry and in the Ohio State Legislature who have fought for many years to reduce blight in neighborhoods celebrated the passage of H.B. 463.

One of those industry stakeholders who has pushed for the passage of anti-blight legislation and worked to create solutions to the spreading of blight is Robert Klein, who founded Safeguard Properties in Ohio in 1990 and currently serves as Chairman of SecureView. Klein has often said that “a vacant property is not like wine. It does not get better with age.”

Klein stated, “Ohio’s ban on the use of plywood is the first legislation of its kind and a game-changing, bold statement that will modernize the fight against community blight. The new legislation will benefit the industry by reducing vandalism and allow the on-time conveyance of the properties. It will protect neighborhoods, reduce blight in the community, and maintain the value of homes in the neighborhoods. It is our hope that more states will follow Ohio’s example.”

Five Star Institute President and CEO Ed Delgado said, “I applaud the Ohio State Legislature for passing H.B. 463. Vacant and abandoned properties are a crisis of national proportion. Using plywood to secure these homes only creates more problems in many cases, and it adversely affects entire communities. Banning its use will keep properties from appearing vacant, which will reduce the potential for crime and help maintain property values, ultimately making the community a better place to live.”

Ohio has long been at the forefront when it comes to innovative solutions to reduce neighborhood blight. Earlier this year, the state passed a “fast track” foreclosure law that would reduce foreclosure timelines in the state from two to three years down to as low as six months.

“(H.B. 463) enhances what we did to reduce blight in foreclosed properties,” said Ohio Rep. Cheryl Grossman, who was a co-sponsor of the fast track bill that passed earlier this year. “With the challenges that our police departments are facing and some of the situations they are responding to, it makes a lot of sense they are banning plywood.”

The passage of Ohio H.B. 463 was the second major advancement in the property preservation industry in the last two months with regard to banning the use of plywood. In early November at the National Property Preservation Conference, Fannie Mae announced a new allowable promoting the use of polycarbonate clearboard instead of plywood on pre-foreclosure properties, and that starting November 9, all vacant Fannie Mae-owned properties, whether in pre- or post-foreclosure state or REO, were required to use an alternative to plywood to secure vacant homes.

Click here to view the complete text for Ohio H.B. 463.

Source: DS News

Additional Resources:

DS News (A New Standard for Property Preservation?)

MReport (Communities Are Clearly Seeing Plywood Alternative)

Maintaining a Positive Relationship with Borrowers During Foreclosure

Posted on by Safeguard

Industry Update
December 23, 2016

The mortgage and servicing industry may be on the steady road to recovery, but servicers themselves are under intense pressure from investors and regulators to ensure a positive consumer experience. That’s the sentiment behind a white paper titled “Minimizing Servicer Risk with Pre-Foreclosure Reports” by American Tax & Property Reporting (ATPR) that urges servicers to find ways to manage foreclosures without disturbing the borrower relationship.

According to ATPR, when a loan goes into default, the servicer “does not have the luxury of speaking in the aggregate and boasting about the overall fall in default rates. Indeed, the rate of borrower default has further to fall.”

One issue is that consumer advocates often falsely claim that investors benefit from foreclosure.

“High default rates have a very detrimental effect on investors,” the white paper stated.

But moreover, the problem of default is even worse for servicers.

“As soon as a borrower becomes delinquent,” ATPR stated, “the servicer’s costs increase and its work becomes more difficult.”

The communications breakdown when a loan goes into default merely exaggerate the problems servicers are facing, ATPR reported. When a borrower misses a payment, communication between borrower and lender becomes significantly more difficult. And the more delinquent the loan gets, “the more distant the borrower becomes until the servicer finds continued communication almost impossible.”

Even in the current market, where default rates are falling and the numbers of delinquent and REO sales are steadily decreasing, “servicers must remain constantly aware of the risk present in each deal they service, both on the borrower side and the collateral side,” the report stated.

The white paper suggested that servicers consider valuation reports, which the firm said gives servicers a good idea of what the property might sell for if the servicer is forced to foreclose. This, however, does not provide enough information for the servicer to determine whether foreclosure makes sense.

“For that,” the white paper stated, “the servicer must have more information about the owners on the deed and any other liens present on the property.”

Pre-foreclosure reports, the paper concluded, provide the information an investor needs to mitigate risks, especially when dealing with portfolios of distressed assets.

Source: DS News

Deadline Looms for Homeowners Fighting Foreclosure

Posted on by Safeguard

Industry Update
December 22, 2016

WORCESTER – People who are fighting – or who someday may want to fight – foreclosures of their homes that predate 2014 need to file legal paperwork before the end of the year to preserve their rights, foreclosure activists warned Wednesday.

“It’s the best-kept secret in the commonwealth,” John C. Schumacher declared Wednesday at a press conference on the topic hosted by the Worcester Anti-Foreclosure Team.

Mr. Schumacher, of Lancaster, said he is one of many homeowners fighting illegitimate foreclosures that many label illegal. But because of a law that went into effect last year, people whose homes were foreclosed on before 2014 will need to file legal challenges by Dec. 30 or they will lose their ability to try to get their homes back.

“People need to act quickly,” said Grace Ross, coordinator of the Massachusetts Alliance Against Predatory Lending. Citing figures she said were provided by the Worcester South District Registry of Deeds, she said 11,081 homeowners have been foreclosed on in the region from 2001 to 2013 – 3,821 in Worcester – all of whom would lose their rights if they fail to act.

Ms. Ross said the new law effectively curtails the statute of limitations to challenge a foreclosure in Massachusetts from 20 years to 3 years. She contends the law – which was conceived by lobbyists for the title insurance industry – is a sweetheart deal for insurers, allowing them to shirk liability associated with problematic titles.

Ms. Ross said many people who lost their homes to foreclosure during and after the 2008 mortgage crisis were victims of predatory lenders. Such lenders used unscrupulous practices in many different areas, she said, and the Supreme Judicial Court in 2011 invalidated thousands of foreclosures across the state.

Ms. Ross said people fighting to win back their homes need to know that if they do not file paperwork with the register by Dec. 30, they will lose their right to a court challenge. She stressed that even people who have been evicted from their homes can try to get them back and should file paperwork if they plan to do so in the future.

Those who want to learn more about how to file the paperwork can contact the Worcester Anti-Foreclosure Team at (508) 614-9238, email worcesterforeclosureteam@gmail.com or visit www.maapl.info.

The law that precipitated the deadline, An Act Clearing Title to Foreclosed Properties, was a bill by state Sen. Michael O. Moore, D-Millbury, that passed in 2015.

While Ms. Ross and other advocates oppose the bill, Mr. Moore said it was necessary. That’s because there are many homeowners who bought foreclosed homes and saw their titles muddied up after the 2011 court decision. As a result, many cannot refinance or sell their properties.

The bill will clear up those titles, Mr. Moore said, so that people who legally bought homes will no longer be in limbo. Mr. Moore said in his eyes, a 20-year statute of limitations to reclaim a home is too long.

“How do you do that to a family who has purchased a home, whether it’s five years, 10 years or 15 years later?” he said.

Mr. Moore further noted that under the law, people who believe they were foreclosed on improperly can still file legal challenges that could yield awards of triple the value of their loss.

“I think my legislation is a good compromise,” he said, noting it actually passed the Legislature twice, after an initial veto in 2014 by Gov. Deval L. Patrick.

Ms. Ross said while Mr. Moore’s intentions may be good, she does not believe the legislation is constitutional, and plans to file a lawsuit challenging it. Ultimately, she believes the legislation will end up protecting those in the insurance business more than homeowners stuck with a bad title.

Ms. Ross also criticized the office of Attorney General Maura T. Healey for, in her opinion, not doing enough to inform homeowners of the change.

The attorney general was charged in the legislation to let stakeholders know about the change. It posted an advisory notice to its website and also sent letters to “stakeholders participating in the foreclosure industry and stakeholders participating in foreclosure prevention, reduction or education programs,” according to a recent attorney general disclosure.

Ms. Ross said she believes the attorney general should have at least issued a press release and, ideally, made more of an outreach effort to homeowners.

Asked about the criticism after close of business Wednesday, a spokesperson for the attorney general’s office said the agency could not immediately respond, as the staff members who dealt with the topic had left for the day.
 
Source: telegram.com