Legislation signed to help Rhode Island homeowners in foreclosure keep their homes
STATE HOUSE – Rhode Island families who have fallen behind on their mortgages because of predatory loans or personal hardships could get a second chance to keep their homes under legislation sponsored by Rep. Jeremiah T. O’Grady and Sen. Gayle L. Goldin and signed into law this week.
The new law paves the way for nonprofit organizations to purchase foreclosed homes in Rhode Island and sell them back to the foreclosed-upon homeowners with mortgages they can afford.
Currently, most lenders in Rhode Island require sellers and buyers of foreclosed homes to sign an affidavit stating that the homeowner in foreclosure will not be allowed to remain in the home.
Modeled on similar laws in Massachusetts and Maryland, the new law will bar such requirements when a nonprofit organization is involved in the transaction.
“Foreclosure-related evictions disrupt Rhode Island families and hurt Rhode Island neighborhoods. This effort addresses both issues. Keeping struggling homeowners in their homes promotes family stability, and preventing foreclosed homes from becoming abandoned blights protects neighborhood stability. It is truly a win-win,” said Representative O’Grady (D-Dist. 46, Lincoln, Pawtucket).
Said Senator Goldin (D-Dist. 3, Providence), “Many families and communities across Rhode Island are still struggling with foreclosures. This legislation removes an unnecessary roadblock so nonprofits can help Rhode Island families keep their homes and their investments in them, with a mortgage they can afford — much to the benefit of those families, their neighborhoods and our state’s economy overall.”
The sponsors worked to develop the legislation (2016-H 7572, 2016-S 2841) with the SUN Initiative, an innovative nonprofit buyback program that has worked to keep some Rhode Islanders in their homes after foreclosure, and will be able to help many more after it is enacted.
The SUN Initiative, which is financed by private investors, has kept over 660 families facing foreclosure in five states in their homes. It buys troubled homes from lenders at fair market prices — the same price a lender would get by selling the property on the open market — and then sells them back to the original homeowners with affordable mortgages.
Working with SUN, Sherry Beauchamp and her husband almost lost their Woonsocket home to foreclosure. Instead, with help from a HUD-certified housing counselor and the SUN Initiative, the Beauchamps repurchased their home, decreased their mortgage from $152,240 to $113,704 and lowered their monthly payments from $1635 to $1132. They learned about the SUN program through HUD-certified housing counselor John Nimmo of NeighborWorks Blackstone River Valley.
Elyse Cherry, the CEO of nonprofit Boston Community Capital and the founder of SUN, adds: “The Beauchamps were able to repurchase their home through SUN because their lender was one of a small number of servicers willing to work with nonprofit buyers like SUN, even without enabling legislation in place. House Bill No. 7572 and Senate Bill No. 2841 offer the 36 homeowners currently waiting to purchase their homes through SUN – and other Rhode Islanders like them a similar opportunity: the prospect of remaining in their home with a mortgage they can afford.”
Available for interview (please contact Meredyth Whitty at firstname.lastname@example.org for info):
Sherry Beauchamp, Woonsocket homeowner who repurchased her home through SUN Initiative
Sen. Gayle L. Goldin
Rep. Jeremiah O’Grady
Elyse Cherry, CEO, Boston Community Capital
John Nimmo, Housing Services Advisor and Educator, NeighborWorks Blackstone River Valley
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903