BOSTON — Gov. Maura Healey signed an attachment to the fiscal year 2025 budget banning municipalities from taking the entire equity in a home in the event of a tax lien foreclosure, a practice detractors call “home equity theft.”

The budget attachment, which Healey signed into law Monday, will legally prohibit the taking of excess equity when a property is foreclosed due to negligent tax payments, requiring all excess equity be returned to the property’s owner within 30 days.

Born out of bill H.2937, filed by Reps. Tommy Vitolo, D-Brookline, and Jeff Roy, D- Franklin, the legislation allows those who have had their home equity taken from them on or after May 25, 2021, to retroactively file a claim.

The U.S. Supreme Court ruled last year that the practice — in which municipalities or private tax lien companies can foreclose on a property for delinquent tax payment and then sell it and keep the excess profit — was unconstitutional in the Tyler v. Hennepin County, Minn. case.

The practice was also found to be unconstitutional in Massachusetts April, when Hampden County Superior Court Judge Michael Callan ruled that takings of excess equity violated Article 10 of the Massachusetts Constitution’s Declaration of Rights.

In an interview Tuesday, Sen. Jo Comerford, D-Northampton, credited Greenfield residents Joan Marie Jackson and Mitchell Speight, who were engaged in a lawsuit with the city of Greenfield over an alleged home equity theft, with bringing the issue to the state Senate’s attention.

“[Jackson and Speight] came up to me at the Greenfield Public Library with a big packet of information and they introduced themselves, and said, ‘This is what had happened to us,’ that they were threatened with losing everything. They told me their story, they gave me the information, and they asked if I would take action on their behalf,” Comerford said.

“It’s a classic, best moment of democracy, where people have the power to change the course of a legislative session because of their own courage and action.”

Jackson and Speight paid off the mortgage on their Greenfield home in 2012. They testified that they fell behind on their property taxes when the COVID-19 pandemic shut down theatrical productions and were served a notice to quit by a law firm hired by the city in 2021. The letter, Jackson said, mentioned they would be evicted by Western Housing Court if they did not vacate the premises by Feb. 2, 2022. Jackson said they received a second notice to quit within 14 days of the first one.

Last year, Comerford spoke on the Senate floor alongside Jackson, Speight and Greenfield activist Al Norman in support of the legislation. In an interview Tuesday, she said that although further legislation might be passed in the future to protect former homeowners from what she called an “abhorrent practice,” she was pleased that the legislation not only made home equity theft illegal, but created an avenue for property owners to sue for their equity.

“Not only is it now impossible to take equity, it sets up a much more accessible, all-around process for homeowners to engage, to be able to save their home from foreclosure,” Comerford said. “It expands from six to 12 months the amount of time that a former homeowner can pursue their right to sue to get their back equity in Superior Court.”

Mayor Virginia Desorgher declined to comment on the legislation.

In an interview Tuesday, Speight and Jackson expressed their appreciation for the legislation, thanking Comerford, Healey, Norman and City Councilor At-Large Wahab Minhas, who campaigned, partially, on ending home equity theft.

Speight said although he and Jackson were able to keep their home, he believed the law would move the needle toward protecting property owners on the state and national levels.

“It’s not about me, it’s about we. If I could be the voice — Joan and I, Al and Sen. Comerford, and all the rest of them who have joined forces with us — for the collective effort to protect those marginalized folks, we were willing to do that,” Speight said.

Jackson also thanked the parties involved in rallying behind the end to home equity theft and passing the law. She referred to the practice as an “egregious constitutional overreach” and said she was pleased by the number of residents who supported banning it.

“This is a new day here in Greenfield,” Jackson said.

Anthony Cammalleri can be reached at acammalleri@recorder.com or 413-930-4429.