Monthly Archives: August 2014

Governor Kills Foreclosure Bill That Would Have Helped Thousands Sell or Refinance Their Homes

Rejects plan to cut title challenge time, as reported by the Boston Globe

Governor Deval Patrick has rejected a controversial bill that was designed to help owners of homes that went through messy foreclosures in recent years.
The measure was pushed by title insurance companies and advocates of people who tried to sell or refinance homes that had gone through foreclosure, only to be stalled by lingering problems with property titles.

The legislation would have cut the time people have to challenge titles and foreclosures in court from 20 years to three. This would help the new owners of foreclosed properties, supporters say, because they wouldn’t be stuck in limbo for years, waiting for the time limit to expire.

Lenders pushed through record numbers of foreclosures in the mid2000s, but in 2009, a state court ruled that many of those foreclosures were flawed because of shoddy paperwork. Many people who bought the homes subsequently found themselves with clouded titles.

Patrick returned the bill to lawmakers with an amendment, asking them to give consumers 10 years to sue over titles instead of three. Patrick’s action effectively kills the legislation since the Legislature, which adjourned for the year at the end of July, is not expected to take up the amended bill.

Patrick, in his letter to legislators, said: “Certainty of a title is a good thing — it helps the real estate market function more smoothly. But this certainty should not come at the expense of wrongly displaced homeowners, or at least, not until we have put this period further behind us.”

Richard Serkey, a lawyer and board member of the Real Estate Bar Association for Massachusetts, called the governor’s decision unfortunate. “There are a whole category of people who bought property in good faith who can’t refinance and can’t sell their properties,” he said.

But Grace Ross, coordinator of the Massachusetts Alliance Against Predatory Lending, called Patrick’s action a “a measured response.”
She said families whose homes were taken by banks during the height of the foreclosure crisis should have several years to sue.
The bill that passed the Legislature law would curb their rights, she said: “If you have a valid legal challenge, you should have your day in court.”

Foreclosures are well below their peaks reached during the worst of the crisis in 2007 and 2008. Even so, foreclosure activity has jumped this year as lenders work through a backlog, according to the Warren Group, a real estate tracking firm. Lenders started 3,264 foreclosures in the first half of 2014, up more than 10 percent from the same period in 2013.
Nationally, some of the biggest banks, including Bank of America, have agreed to pay billions of dollars in settlements over faulty lending and foreclosure practices.

Realtors’ Group Forms Super PAC

According to Banker & Tradesman, Bay State Realtors are getting into the super PAC game.

According to a filing with the state Office of Campaign and Political Finance, an official with the Massachusetts Association of Realtors on Thursday formed an independent expenditure political action committee, sometimes called a “super PAC.”

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Justin Davidson, a staff attorney with the Waltham-based association, is the super PAC’s chairman and treasurer, State House News Service reported.

Davidson told the News Service that the super PAC does not have “any specific plans at this point.” The PAC will focus on issues “involving real estate, property rights and taxes,” according to the filing. Davidson noted that the Realtors also still have a “traditional” PAC, which makes political donations to candidates.

Independent expenditure PACs, or super PACs, make expenditures that expressly advocate the election or defeat of a candidate, and cannot take actions in cooperation or consultation with a candidate or a political party, according to the Federal Election Commission.

Rockland Trust To Acquire Peoples Federal

According to Banker & Tradesman, Independent Bank Corp. will acquire Brighton-based Peoples Federal Bancshares in a $130.6 million deal expected to close early next year.

“This is part of the puzzle that positions us as the alternative regional commercial bank,” Christopher Oddleifson, CEO of Independent and Rockland Trust, said today.

rtcPeoples Federal Bancshares Inc. is the corporate holding company for Peoples Federal Savings Bank. Independent Bank Corp. is the parent company of Rockland Trust.

Peoples Federal has eight full-service branches, four of them within the city of Boston in Brighton, Allston, West Roxbury and Jamaica Plain. The other branches are located in Brookline, Norwood, Westwood and West Newton, and the bank presently has approximately $606 million in total assets, $435 million in deposits and $497 million in loans.

Oddleifson said Rockland Trust intends to keep all those branches and branch personnel. Additionally, two of Peoples Federal’s senior management will join Rockland Trust. Jim Gavin, presently chief lending officer at Peoples Federal, will join Rockland Trust as senior vice president of commercial lending, and Chris Lake, currently chief financial officer, will join the bank as senior vice president and director of risk management.

“I just can’t understate the importance of that,” Oddleifson said. “Often when senior management leaves, some of that continuity leaves and it takes a while to gain that momentum again. This will help begin the momentum before the deal even closes and charge into the market faster with a great deal of momentum.”

Oddleifson said that Independent had been in talks with Peoples Federal for a few months now.

“Because the number of banks that are stock-based are so few… it used to be, you could predict, there would be four or five a year, and Citizens, TD, or Sovereign would buy them all,” he said. “A couple months ago, we were invited into a process. We got a confidential book of information, we evaluated that, and sent them a letter of interest, and then we were invited to an exclusive negotiation… It was a competitive process, and fortunately, we came out on top.”

According to a statement announcing the deal, 60 percent of outstanding Peoples Federal Bancshares shares will be exchanged for Independent shares at a fixed exchange ratio of 0.5523 of an Independent share for each Peoples Federal share. The remaining 40 percent of Peoples Federal shares will be exchanged for $21 per share in cash.

Based on Independent’s $36.17 per share closing price on Monday, the transaction is valued at approximately $130.6 million. The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes and to provide a tax-free exchange for Peoples Federal Bancshares, shareholders who receive Independent shares.

The agreement provides that, effective as of and contingent upon the merger, Independent and Rockland Trust will add to its board of directors one current member of the Peoples Federal Bancshares, Inc. board of directors.

The transaction has been approved by the board of directors of each company but is subject to certain conditions, including the receipt of required regulatory approvals, and approval by Peoples Federal Bancshares, Inc. shareholders. The parties anticipate that the transaction will close in the first quarter of 2015.