Bill > S482

This bill establishes a Massachusetts Foreclosure Mediation Program (MFMP) to help homeowners avoid foreclosure by requiring creditors, concurrently with foreclosure notices, to notify the MFMP, which then informs borrowers of their right to mediation. A "borrower" is defined as an individual homeowner residing in the property, and a "creditor" encompasses anyone holding a mortgage loan. The program will be administered by a neutral "Mediation Program Manager" selected by the Attorney General, and mediation sessions will be conducted by trained "mediators" who understand available homeowner assistance programs. During mediation, both the borrower and creditor's representatives will discuss alternatives to foreclosure, such as loan modifications (defined as "modified mortgage loans" under various federal or state programs), principal reduction, or short sales. Creditors must provide financial analyses, including a "net present value" calculation comparing the outcome of mediation versus foreclosure, and borrowers must share their financial situation. If mediation fails despite good-faith efforts, a certificate of good faith will be issued, allowing foreclosure to proceed, and all mortgage modifications must be recorded. The costs of the program will be shared by the parties, with a surcharge on certain court filings, and a borrower's inability to pay will not prevent participation. The program manager will also develop mediator training standards and report annually on the program's outcomes.