By Lorraine Blasor
For News is my Business
Despite intense last minute lobbying by Puerto Rico’s banking sector, Gov. Luis G. Fortuño has signed a law requiring that all foreclosure proceedings of a primary residence include compulsory mediation. The law is effective in July 2013.
The latest in a series of measures aimed at protecting consumers, the new law states that as part of compulsory mediation, homeowners whose primary residence is being foreclosed due to a mortgage default or a court sale will have to be informed of all the alternatives available to help them keep their home.
“Our administration has implemented a series of measures to protect the homes of Puerto Ricans. We seek to guarantee that each family will have a safe roof and that is why we have developed initiatives to promote this,” the governor said in a press release.
The Puerto Rico Chapter of the American Association of Retired Persons (AARP) expressed satisfaction over the signing of the law. The group actively campaigned for the measure and even mobilized its 100,000-person island base to counter last minute lobbying by bankers, asking members to call Fortaleza, the governor’s mansion.
“This is one more example of what can be accomplished when people get behind a project,” said AARP State Director for Puerto Rico Jose Acarón, stressing that a home is a family’s most important asset, especially in old age.
The Puerto Rico Bankers Association has vowed to fight the law ahead of its implementation next year.
The group’s Executive Vice President Arturo L. Carrion told News Is My Business last week that the bill was “not necessary” because banks have already put in place measures to help homebuyers in default to refinance or restructure problem loans. He said that the law will have a deleterious impact on the secondary mortgage market and result in additional costs to banks and consumers.
In the press release, Fortuño said his Chief of Staff Miguel Romero met with AARP leadership and agreed to work on any amendment that might be needed to improve the legislation.
“We will continue working to develop additional projects like these,” the governor said.