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In a speech this morning before the Greater Boston Chamber of Commerce, Coakley said one bill co-sponsored by Sen. Susan Tucker (D-Andover) and Rep. Steven M. Walsh (D-Lynn) would require lenders to take measures designed to keep families at risk of foreclosure in their homes by reducing the interest rate and the principal owed.
“Our legislation mandates that creditors take commercially reasonable efforts to avoid foreclosure on mortgage loans securing homes that are owner-occupied,” she said.
Under the measure, owner-occupants with risky mortgage features such as interest-only loans or loans with short-term introductory interest rates or adjustable rate mortgages, would be offered a loan modification based on the home’s current value.
“Our legislation also provides a safe harbor for creditors who comply,” she said. “In other words, we can be the bad guy to get these loans modified in a way that makes sense for everybody.”
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