A new law looks to help financially disadvantaged Rhode Islanders keep their properties and avert struggles like that of the 81-year-old woman who nearly lost her home this winter over a $500 sewer bill.
Signed this month by Gov. Donald L. Carcieri, the Madeline Walker Act of 2006 gives Rhode Island Housing the right of first refusal to acquire the tax lien when a residential property becomes subject to tax sale. The law applies only to properties that are owner-occupied and contain three or fewer units.
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If it exercises its right under the bill, Rhode Island Housing can help the owner to clear the tax lien on the property, or can take the title and acquire the property in its own name, in
a manner “pursuant to regulations to be developed by the corporation, consistent with its purposes.”
The law also requires that communities notify Rhode Island Housing of any tax sales taking place.
The bill bears the name of Madeline Walker, an ailing Providence resident who in December was evicted from her house of 50 years because she had neglected to pay a $496 sewer bill to the Narragansett Bay Commission. Officials and organizations – including Carcieri and the Urban League of Rhode Island – rushed to Walker’s aid and succeeded in getting her home back.
The new law will give homeowners additional protection against situations like Walker’s, Carcieri said.
“This is about providing assistance to those who are most vulnerable and ensuring that they are armed with the information they need to avoid losing their homes,” Carcieri said in a news release announcing his signing of the bill. “The American dream is all about home ownership. We don’t want to see this dream taken away from our economically-disadvantaged residents.”
By giving the right of first refusal to Rhode Island Housing, bill sponsors Sen. Harold M. Metts, D-Providence, and Rep. Joseph S. Almeida, D-Providence, aimed to give residents a means of keeping their homes. The agency will work with homeowners whose are delinquent in their taxes on finding ways to refinance their homes without excessive fees, as well as helping families with loans.
Rhode Island Housing, a quasi-public corporation that works to help residents meet their affordable-housing needs, was willing to take on the responsibilities outlined in the bill because it is “committed to helping people hold onto their homes,” spokesman Chris Barnett said last week.
With its experience working both within the market and with families in need of help, Barnett said, the corporation already has the real estate savvy and knowledge required to be successful under the law.
Rhode Island Housing will offer the affected homeowners counseling, financial assistance and the means to get legal advice, Barnett said. However, he added, in order to be successful, the agency will need a host of partners. Legal services, such as title searches, will still be necessary, he said, as will appraisals.
“Make no mistake,” Barnett said. “This is a difficult challenge, but we will be able to help some people keep their homes. And when unsuccessful, we will do our best to ensure they keep as much of their equity as possible.”
Barnett added that Rhode Island Housing has found that more than half of “serious” bill delinquencies are brought about by something other than a customer’s refusing to pay.
“More often than not, the delinquency is a symptom of something other than just an unwillingness to pay the bill,” Barnett said. “The issues range from illness to family problems to financial illiteracy.”
The legislation also creates a
six-member board – composed of appointees from Consumer Credit Counseling Services of Rhode Island, Rhode Island Legal Services, the Housing Network of Rhode Island, the Urban League of Rhode Island and the Center for Hispanic Policy and Advocacy (CHisPA) – to advise Rhode Island Housing.
Two other bills recently enacted as law also aim to help residents gain access to and stay in affordable housing. The first will make it more difficult for owners to convert housing units from affordable to market-rate. The second will provide increased regulation of the mortgage foreclosure industry.
