The problem arises when the savvy "subprime" borrower (speculator) leases the property to his children/relatives at below market rents for extended terms allowing the banks (hedge funds) to foreclose the property. Now, the banks would be saddled with foreclosed property years later waiting for these "sweatheart" leases to expire.
Yet another fallout from the foreclosure crisis has been large numbers of renters who lose their housing through no fault of their own, said State Sen. Sue Tucker, an Andover Democrat who sponsored the bill. The Senate felt very strongly that tenants deserve some protection.
The speculator's children sublease the property for market rent and make more money off the banks. Under this bill, the State Government's intervention will only prolong the agony of this down cycle and create more quicksand for the market to wade through.