Bill > H888

This bill establishes a mandatory foreclosure mediation program in Massachusetts, requiring lenders (referred to as "creditors") to engage in good faith negotiations with homeowners facing foreclosure before initiating legal proceedings. The program, administered by a neutral "Mediation Program Manager" selected by the Attorney General, mandates that creditors offer homeowners a notice of their right to mediation, which is also communicated by phone and in multiple languages. If a homeowner chooses to participate, a neutral mediator will facilitate an in-person session (or virtual if agreed upon) between the homeowner and a representative of the creditor who has the authority to negotiate alternatives like loan modifications, principal reductions, or short sales. Both parties must provide detailed financial information, including a net present value analysis from the creditor, to the mediator and each other. If mediation is unsuccessful despite a good faith effort from both sides, a certificate of good faith will be issued, allowing foreclosure to proceed. The bill also outlines procedures for mediation agreements, reporting requirements, and cost-sharing for the program, with a cap on the borrower's contribution and a surcharge on foreclosure filings. Importantly, participation in mediation does not waive any legal rights or defenses for either party, and creditors are not obligated to modify a loan if they choose not to.