Lead Sponsor: Senator Jamie Eldridge

Summary:  This bill would allow former homeowners of foreclosed homes to remain in those homes and pay rent until the lender resells the property, so long as they are willing and able to be responsible tenants and pay a fair market rent.

Why This Matters: Foreclosed homes often remain vacant for months or even years, with adverse effects for the neighborhood and surrounding community: blight, neglect, public safety risks, and a decrease in local property values.

Allowing former homeowners to remain in their foreclosed homes as tenants will help us reduce the number of unnecessary vacancies in our communities, increasing neighborhood stability while decreasing the economic and social costs to our communities from foreclosures. 

At the same time, the former homeowners would be required to meet all the standard tenant responsibilities to protect the property, not create a nuisance, and pay fair market rents. The vast majority of former homeowners are already committed to upkeep for their home and can afford fair market rents.

What this Bill Would Do: This bill adds a section to the Massachusetts foreclosure law to allow homeowners and their families to remain in their homes and pay rent after foreclosure under certain limited circumstances for a limited period of time.

This legislation is intended to prevent unnecessary vacancies, which occur when a bank forecloses on a home, evicts the former homeowners, and then leaves the property vacant.  If the foreclosed home is purchased by a new owner-occupant, that new owner may file an eviction action against the former owner as allowed by current law.

If the former homeowners want to stay, they must comply with basic occupancy obligations and tenant law: pay the rent (in an amount agreed to between homeowner and lender or, if no agreement, the HUD fair market rent), not cause a nuisance, not commit illegal acts, etc.

If the former homeowner does not comply with these standard rules, the purchaser at foreclosure can bring an eviction action against the former homeowner.