Kaine proposes measure to prevent foreclosures
- February 28, 2008
by Jessica Sabbath
Gov. Timothy M. Kaine has proposed legislation to combat the rise in foreclosures during the subprime mortgage crisis.
Kaine’s bill, based on recommendations from the Virginia Foreclosure Prevention Task Force he created in November, would allow homeowners who have defaulted on subprime loans to receive counseling before lenders send them acceleration notices. They would also have the ability to delay foreclosure for 30 days.
The bill would require lenders to notify borrowers at least 10 days before they send them a notice of acceleration. In the letter they would be required to let homeowners know foreclosure is avoidable and list agencies that could provide financial counseling.
The borrower would have the responsibility of contacting the lender by the date specified in the letter to receive the 30-day extension. The bill would allow lenders to immediately send borrowers a notice of acceleration if they do not hear from them by that date.