At the request of Rhode Island's Attorney General, the Exeter town council voted Monday to support the removal of a sunset provision regarding the residential mortgage foreclosure mediation passed in 2013.
The mortgage foreclosure mediation, which provides protections to help homeowners avoid foreclosure and remain in their homes, is scheduled to sunset on July 1 of this year.
In response to the law's approaching end date, Attorney General Peter Kilmartin's office sent a letter to Town Administrators across the state last month urging their support of the removal of the sunset provision.
“If that sunset is not removed, Rhode Island homeowners who fall behind on their mortgage will lose the right to the assistance this law has provided,” wrote Assistant Attorney General Joee M. Lindbeck.
In part, the law provides a "mediation coordinator" to a homeowner when he or she is notified of a potential foreclosure.
The coordinator serves as an unbiased, impartial and independent coordinator and facilitator of the “mediation conference” in order to determine whether an alternative to foreclosure is economically feasible to both the mortgagee and the mortgagor, and if it is determined that an alternative to foreclosure is economically feasible, to facilitate a loan workout or other solution in an effort to avoid foreclosure.
The law was initially passed due to residential mortgage foreclosures having “negatively impacted a substantial number of homeowners throughout the state, creating a situation that endangers the economic stability” of many RI citizens.
“As the need for a mortgage mediation process has evolved, it is important for the state to develop a standardized, statewide process for foreclosure mediation rather than a process based on local ordinances that may vary from municipality to municipality,” the law stipulated.
It was also modeled on local ordinances adopted by five RI communities that recognized the need for a more balanced foreclosure process: Providence, Cranston, Warwick, East Providence, and Warren.
Exeter Town Council President Kevin McGovern said he supported the removal of the sunset provision.
“The ordinance that the state wrote had a sunset clause, which is fast approaching, and [the AG] is just urging us to support removing the sunset clause so that the law stays active,” he said. “I think it’s a good idea to keep the mediation to keep people in their homes, opposed to banks becoming landlords.”
In her letter from the AG’s office, Lindbeck said that if the State law is repealed in July, it would now be up to municipal leaders like McGovern and the rest of the Exeter town council to take a “leadership role.”
“Five years ago, it was the municipalities that led the way in putting a foreclosure mediation process in place. Municipal leaders can take a leadership role again to ensure that this tool remains available to RI homeowners. If the State law is repealed in July, the only way homeowners will receive mediation protection is if the municipalities enact their own medication ordinances,” she wrote.
Lindbeck also stressed the law’s positive impact on both individual homeowners and surrounding properties since its passage.
“Over half of the homeowners who have completed the foreclosure mediation process were able to avoid foreclosure and remain in their homes,” she wrote. “As you know, the foreclosures do not only impact homeowners, but also on surrounding properties and the neighborhood as a whole.”
In addition, the AG attached a model ordinance enacting a foreclosure medication solution for communities “to ensure that even if the law were to sunset, homeowners in your community would continue to have access to foreclosure mediation services.”
The town council voted 4-0 in support of the sunset’s removal from the law. Councilman Raymond Morrissey, Jr. abstained from voting due to a conflict of interest.