Fight the Forclosure! Move to Cranston

Posted on Jan 20 2012 - 4:03pm by Tim Eyre

Located in the Northeastern portion of the country, near the Atlantic, sits the town of Cranston, Rhode Island. For many, the town is just another city. Sure it has been named one of the “Top 100 Places to Live” by Money magazine. Yes it has been named one of the 25 safest cities by the CQ Press. It is more than just safety and tourist research that makes this town stand out. It is the fact that it is virtually foreclosure proof.

In 2009, the city of Cranston passed two ordinances to make it harder for homeowners to be evicted from their houses. After seeing the economy and homeownership take a turn for the worst, the town decided to do something about the situation. Instead of letting others be evicted from their homes, they found a way to help.

One ordinance, directed at homeowners, “provides for mandatory pre-foreclosure ‘conciliation conferences,’” This also includes a mandatory written foreclosure intent by the institution. Then, both parties must meet for a “loan/mortgage conciliation conference to accomplish formal discussion and mediation regarding the mortgage.” Through the use of a professional financial mediator, the two parties work to reach a formal agreement regarding the debt.

The second ordinance is meant to help protect tenants in foreclosed properties. Tenants are to be given multiple notices – in both English and Spanish – in the event of a foreclosure, or a change in to whom rent should be paid. Penalties for not following these ordinances result in a fine of more than $1,000 per offense.

Are the Ordinances Working?

What is most interesting of all is that the area has seen very low numbers of foreclosures. But much like the chicken and the egg, we’re not sure which came first. Were there initially a low number of foreclosures? Or is the foreclosure number low because of the ordinances? Either way, the city’s plan seems to be working.

It is advancements like the ones seen in Cranston that have helped many homeowners stay homeowners. Other towns in Rhode Island, including Providence, have already adopted similar ordinances. Hopefully the trend will spread, as other towns begin to see value in finding a solution rather than reigning contracts. It is solutions like these that will help boost the economy and allow banks to be able to collect on their outstanding debts.

Have questions or comments? Let us know.  And for more mortgage-related tips, be sure to check back in.

Tim Eyre