Legislation signed to help R.I. homeowners struggling with foreclosure remain in homes

PROVIDENCE – Legislation, sponsored by state Rep. Jeremiah T. O’Grady and state Sen. Gayle L. Goldin and signed into law last week, will give Rhode Island homeowners in foreclosure a second chance to keep their homes if they failed to pay their mortgages due to predatory loans or personal hardships.

The new law allows nonprofit organizations to purchase foreclosed homes in Rhode Island and sell them back to the foreclosed-upon homeowners with lower mortgages.

“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,” Goldin, D-Providence, in prepared remarks.

Rhode Island lenders typically require all parties to sign an affidavit prohibiting the homeowner from remaining in the house; however, this new law mirrors Massachusetts and Maryland laws which bar such requirements when a nonprofit is involved in the transaction.

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“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 O’Grady, D-Lincoln.

Goldin and O’Grady developed the legislation with the nonprofit buyback program, the SUN Initiative.

Financed by private investors, the SUN Initiative buys homes from lenders at fair market prices and then sells them back to the original homeowners with affordable mortgages.

This program has successfully kept 660 families in five different states in their homes after foreclosure, including Woonsocket native Sherry Beauchamp and her husband. The Beauchamps’ mortgage decreased significantly from $152,240 to $113,704 and their monthly payments from $1635 to $1132 when they bought their home back with assistance from a HUD-certified housing counselor and the SUN Initiative.

They learned about the SUN program through HUD-certified housing counselor John Nimmo of NeighborWorks Blackstone River Valley.

“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,” said Elyse Cherry, CEO of nonprofit Boston Community Capital and founder of SUN, in a statement.

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