Gov. Deval Patrick filed legislation aimed at preventing future foreclosures in Massachusetts last week at the State House.

Gov. Deval Patrick filed much-anticipated legislation last week aimed at preventing future foreclosures in the state and helping some homeowners being foreclosed on to avoid being dragged into more financial trouble.

Patrick’s bill, “An Act Implementing the Division of Banks Mortgage Summit Recommendations,” would make Massachusetts one of the first states to criminalize mortgage fraud for all lenders, and the only one to require would-be borrowers to affirmatively opt-in to a subprime adjustable-rate loan.

The bill is supported by housing advocates, who cite record numbers of foreclosure filings in recent months, as well as the heads of agencies that would enforce it, but Massachusetts lenders are reacting more guardedly.

“The devil is in the details,” said Kevin Cuff, executive director of the Massachusetts Mortgage Bankers Association.

Denise Leonard, executive director of the Massachusetts Mortgage Association, a trade group representing brokers, lenders, wholesalers and affiliates, said the opt-in proposal was not discussed at the summit last fall.

The provision specifically would not allow an adjustable-rate loan on an owner-occupied one- to four-family home to be made unless the loan was either prime rate or the borrower had signed a statement accepting it, and could demonstrate that he or she had received counseling from a Division of Banks-approved advisor about the transaction.

“It was added in by the governor, and was not a part of the work group’s recommendation,” Leonard said. It also was not discussed at the summit meetings she attended, she added. Leonard was in the Rules and Enforcement summit working group, which was one of two.

Cuff and Leonard both suggested that with the opt-in provision, Patrick is assuming that every borrower of a subprime, adjustable-rate mortgage is at risk financially.

“The governor has made the assumption that everybody in a subprime adjustable-rate mortgage is buying a triple-decker in Dorchester or Brockton,” Cuff said. “I think that’s an incorrect assumption for him to make.”

“They are not all at risk,” Leonard added. “It could be someone who has any risk factor that puts them outside that [prime rate] parameter. I think that to be targeting a specific product or program this way could have unintended consequences.”

Massachusetts Commissioner of Banks Steven Antonakes called the opt-in provision one of many “vital” elements of the bill. Others, he said, include criminalizing fraud and prohibiting “foreclosure scams.”

Specifically, Patrick’s bill would prohibit the transfer of title to residential property in default or foreclosure to anyone whom the original title-holder expects will eventually convey it back to him or her, unless the purchaser is an immediate relative.

‘Rescue Schemes’

Attorney General Martha Coakley, who on June 1 issued emergency regulations banning “so-called foreclosure rescue schemes,” and in March sued 19 individuals and companies for allegedly participating in several of them, supports that portion of Patrick’s bill, a spokeswoman said.

Coakley has not yet reviewed the entire bill, the spokeswoman added. However, in March, she testified before a state legislative committee in favor of adding non-bank lenders to those covered under existing mortgage fraud criminal statutes, and increasing penalties to higher than the current misdemeanor level.

In addition, her emergency regulations about “rescue schemes” and the bill’s similar provision are complementary efforts, Antonakes said.

“The attorney general’s solution is regulatory, and ours would be statutory,” he explained.

Cuff said the 400-member MMBA supports some provisions in Patrick’s bill.

“The foreclosure scam prevention we would be in favor of, and the notice of a right to cure,” he said. The bill would increase from 30 to 90 days the amount of notice lenders have to give borrowers they intend to foreclose on, and forbid attorneys’ fees or charges from being imposed on homeowners during that time.

Patrick’s bill would make it a crime for any person to commit residential mortgage fraud, punishable by imprisonment of up to five years or a fine of up to $10,000 for an individual, or $100,000 for a company.

It also states, “A person commits the offense of residential mortgage fraud when, with the intent to defraud, the person knowingly” makes, uses or facilitates the use of any deliberate material misstatement, material misrepresentation or material omission in connection with a mortgage loan; receives any money in connection with a closing that the person knows was the result of such misstatements; or coerces a real estate appraiser to inflate the value of property used as collateral for a loan.

While the bill does not define whether the “person” potentially subject to criminal penalties would be a lender, attorney, appraiser, borrower or any other involved in the mortgage process, Antonakes said the penalties are intended to be “focused more on the industry.”

Joseph Kriesberg, president of the Massachusetts Association of Community Development Corporations, said his nonprofit affordable housing advocacy agency, the policy arm of Massachusetts’ community development movement, wholeheartedly supports Patrick’s bill.

“We support the bill, and we are glad the governor has filed it,” he said.

Patrick’s bill is now one of many filed this year to address the state’s mortgage crisis, Kriesberg pointed out, and at this point, “there needs to be a sense of urgency” in getting some kind of law passed to address the crisis.

“There’s no shortage of ideas, and no shortage of legislative language,” he said.

“We do feel strongly that there is no silver bullet. We need to license [originators], criminalize bad activity, have the Community Reinvestment Act applied to mortgage companies, and we need consumer counseling.”

Kriesberg added that he hopes many of the ideas will be combined into one bill and that it will be finalized before the Legislature’s summer recess.

Patrick originally announced at MACDC’s annual State House lobby day on April 25 that his Office of Housing and Economic Development would file the legislation. The governor eventually filed it himself.

Antonakes said he hopes the governor’s bill will “be heard quickly and reviewed positively.”

The bill has been referred to the Legislature’s Joint Committee on Financial Services, which will schedule a hearing to discuss it.