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SD 1320

An Act establishing a Massachusetts foreclosure prevention program

194th Legislature (2025-2026) Introduced by Adam Gómez

Establishes a Massachusetts program to prevent foreclosures by mandating supervised conferences between creditors and eligible borrowers to pursue affordable loss-mitigation option

House concurred
0
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Bill Summary · SD 1320

Summary: An Act establishing a Massachusetts Foreclosure Prevention Program (SD 1320)

Overview

  • Bill Number: SD 1320
  • Title: An Act establishing a Massachusetts foreclosure prevention program
  • Purpose: Create a state-run framework to prevent foreclosures on owner-occupied residential loans by mandating supervised foreclosure prevention conferences and exploring alternatives to foreclosure.
  • Status: House concurrence (the House has adopted the Senate language)
  • Introduced: February 27, 2025
  • Legislative classification: Proposed bill

What the bill would do

  • Establish the Massachusetts Foreclosure Prevention Program as a new section (Section 35D) to be added to Chapter 244 of the General Laws.
  • Require creditor and eligible borrower to participate in supervised foreclosure prevention conferences intended to identify and pursue sustainable mitigation options to avoid foreclosure.

Key definitions and scope

  • Covered loans: Loans secured by liens on real property that serves as the borrower's primary residence, including up to four rental units if the property remains the primary residence. This includes reverse mortgages, condos, and cooperatives. Excludes certain liens (e.g., judgment, tax, municipal services, or government-imposed penalties).
  • Creditor and creditor’s representative: Broadly defined to include originators, holders, investors, servicers, and other related parties; excludes the Commonwealth as a creditor.
  • Eligible borrowers: Borrowers with covered loans who are at risk of default, including those served with a notice of right to cure, current borrowers at imminent risk, borrowers referred by a judge, or borrowers in bankruptcy with relief for conference participation.
  • Foreclosure prevention program administrator: An entity designated by the Attorney General to run the program, set guidelines, and oversee monitor training.
  • Conference monitors: Trained individuals (potentially including retired judges or professionals in law, real estate, accounting, mediation) who facilitate conferences and are shielded from civil liability for performance, except in cases of gross negligence.
  • Good faith, loss mitigation, and certificate of compliance: Standards requiring honest effort to reach reasonable alternatives and a certificate confirming either good-faith effort or borrower non-participation.

Conference procedure (highlights)

  • Notice to participate: When a notice of right to cure is served, the administrator must be notified; the borrower then receives a notice of right to participate in a supervised conference.
  • Timelines: The administrator must issue the conference notice within five business days of receipt of the notice to cure or borrower’s request to participate.
  • Objective: Conduct conferences to evaluate and implement loss mitigation options that are commercially reasonable and legally compliant.

Who is affected

  • Borrowers with covered loans who occupy and/or own the primary residence (including some multi-unit properties used as residence).
  • Creditors, servicers, and other loan participants involved in covered loans.
  • Foreclosure prevention program administrator and conference monitors, who would oversee and facilitate the process.

Implementation and implications

  • Administrative framework: Requires designation of an AG-appointed administrator, creation of guidelines, and establishment of trained monitors.
  • Compliance focus: Emphasizes good-faith negotiations and objective loss mitigation, with a certificate of compliance signaling either a negotiated alternative or borrower non-participation.
  • Funding and timeline: The provided text does not specify funding; successful implementation would depend on appropriations and ongoing oversight. The bill follows a prior similar measure (Senate No. 653, 2023-24).

Compiled from official sources — confirm details with the bill’s official record.

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