NEWS

Senate OKs extending foreclosure protections for 5 years

But a similar bill in House has stalled

Christine Dunn
cdunn@providencejournal.com

PROVIDENCE, R.I. — With a vote of 31 to 0, the state Senate passed a bill Wednesday that would extend for another five years a law requiring banks to mediate with homeowners before starting a foreclosure.

The state's Foreclosure Mediation Act, passed in 2013, is set to expire July 1.

The law requires lenders to give homeowners the option of meeting with their lender and an independent mediator from Rhode Island Housing to attempt to work out a solution and avoid foreclosure.

The Senate's amended version of the bill, S 2270, Sub A., introduced by Sen. Harold Metts, D-Providence, would extend the law until July 1, 2023, and would cut the filing fee charged to banks to $100, down from $150. If the homeowner agrees to the mediation, the bank must pay another $350 for mediation services.

Companion legislation, H 7385, has stalled in the House.

The Rhode Island Bankers Association has objected to the costs of the mediation requirement, which they said has totaled about $7 million to date.

But Metts, speaking Wednesday on the Senate floor, called the cost "a pittance" compared with the record profits being earned by the nation's big banks. Those profits will grow, he said, since Congress "opened the floodgates yesterday," by weakening provisions of Wall Street reform legislation passed in the wake of the foreclosure crisis.

The mediation bill is especially important because Congress is "deregulating the banks," Metts added.

 According to Barbara Fields, executive director of Rhode Island Housing, as of March 31, the law has helped 679 Rhode Island families stay in their homes.