New bill aids tenants in foreclosed properties

The Globe reports that the Massachusetts state legislature just passed a bill called "An Act to Stabilize Neighborhoods" which, among other things, prohibits lenders who take possession of foreclosed properties from evicting tenants who are up to date in their rent at least until the property is ready to be sold to a third party. A representative of big lender Citibank criticized the bill, saying "We have a responsibility to recover the property either for ourselves or the investor-owner of the mortgage, so it can be marketed and sold promptly." The newspaper story also quotes other lenders as saying the new law will make it more difficult to sell foreclosed homes if tenants are still living in them. I suppose that's true, but I can see why the legislature might be more concerned with protecting the interests of innocent tenants than those of foreclosing lenders. This new bill has other requirement designed to curtail foreclosures including a requirement that lenders meet and negotiate with home owners prior to commencement of foreclosure proceedings.