PETITION OF:

SECTION 1. The General Laws, as appearing in the 2004 Official Edition, are hereby amended by inserting after sub-section Section 3 (v) of Chapter 23B, the following new sub-section:-

(w) establish, conduct and maintain a program to provide mortgage foreclosure counseling services and emergency mortgage assistance loans to eligible homeowners facing mortgage foreclosure.

SECTION 2. The General Laws, as so appearing, are hereby further amended by inserting after Section 29 of Chapter 23B, the following new sections:-

Section 30. Massachusetts Homeownership Protection Program.

The department shall, subject to appropriation, operate an emergency mortgage assistance loan program for eligible homeowners facing mortgage foreclosure.

Section 31. Regulations.

The department shall adopt, and may from time to time amend or repeal, regulations to determine said program’s eligibility requirements that shall include, but not be limited to, job loss, injury or illness, victimization by crime, defaults on child support, predatory or high cost loans as defined in chapter 183C, or unfair or deceptive practices by mortgage brokers or lenders.

Said eligibility requirements shall further include that homeowners eligible to receive financial or other assistance under this program shall be mortgagors of a single-family property, including condominiums and two, three and four unit structures, occupied by the mortgagor as his or her primary residence, and who:

(a) has been notified by any mortgagee of its intention to foreclose on one or more mortgages on said primary residence.

(b) the mortgagor has registered in a timely manner with a credit or housing counseling agency approved by the department to provide mortgage foreclosure prevention services under this program.

The department shall adopt, and may from time to time amend or repeal, any other rules and regulations which it deems necessary for the proper administration said program.

Section 32. Credit counseling; criteria.

The department shall establish a set of criteria and procedures to assess and certify the capacity of not-for-profit credit and housing counseling agencies to provide mortgage foreclosure prevention services under this program. Subject to appropriations, the department may enter into contracts with qualified not-for profit organizations to provide said foreclosure prevention services.

Section 33. Foreclosure Prevention Fund.

The department shall establish a foreclosure prevention fund to provide loans of up to $25,000 to eligible homeowners participating in this program and to provide foreclosure intervention counseling services under section 32. Loans may be used to cure any mortgage delinquency, reduce mortgage principal or interest payments or provide such other financial assistance deemed necessary to ensure the sustainability of the mortgagor’s homeownership. Loans may only be provided to eligible homeowners who can reasonably be expected to resume regular mortgage payments within a two-year period. The department may tailor the terms and interest rate of the loans to meet the financial needs of each borrower. However, all loans shall be repaid to the loan fund in the event of the sale or refinancing of the property. All repayments of principle and interest on the loans shall be retained by the department and used for the continued operation of the loan fund.

The fund shall consist of all revenues received by registers of deeds under section 34 , any repayments of loan principal and interest received from loans made by the fund, any funds appropriated by the legislature for the purposes of the program and all other monies credited to or transferred to from any other fund or source pursuant to law. The department may also utilize a reasonable percentage of any funds appropriated, not exceeding 10 per cent of such funds, for administrative costs of the program.

Section 34. Surcharges; fees of register of deeds; fees of assistant recorder.

The fees of the registers of deeds, except as otherwise provided, to be paid when a mortgage foreclosure deed & affidavit are left for recording, filing or deposit shall be subject to a surcharge of $500. All surcharges on fees collected pursuant to this section shall be forwarded to the Massachusetts Foreclosure Prevention Fund, established in section 33.

The fees of the assistant recorder, except as otherwise provided, to be paid when a mortgage foreclosure deed & affidavit are left for recording with respect to registered land, filing or deposit shall be subject to a surcharge of $500. All surcharges on fees collected pursuant to this section shall be forwarded to the Massachusetts Foreclosure Prevention Fund, established in section 33.

SECTION 3. The General Laws, as so appearing, are hereby further amended by inserting after Section 14 of Chapter 244, the following new Section 14A: -

Section 14A. Pre-Foreclosure Notice to Mortgagor.

The mortgagee or person having his estate in the land mortgaged, or a person authorized by the power of sale, or the attorney duly authorized by a writing under seal, or the legal guardian or conservator of such mortgagee or person acting in the name of such mortgagee or person, may, upon breach of condition and without action, do all the acts authorized or required by the power; but no sale under such power shall be effectual to foreclose a mortgage, unless notice has been provided to the mortgagor of their right to receive assistance under sections 30 through 33 of Chapter 23B as established by this Act.

No action may be commenced under section 14 of chapter 244 until 30 days after such notice has been provided to the mortgagor. Said notice is to be provided to the mortgagor at the same time that the first action to foreclose is commenced pursuant to the Soldiers’ and Sailors’ Civil Relief Act as required by Chapter 57 of the Acts of 1943, as amended. If the mortgagor has registered with an approved foreclosure counseling agency as defined in section 32 of chapter 23B within thirty days of receiving notice from the mortgagee, then no action may be commenced under section 14 of chapter 244 for an additional sixty days in order to provide the mortgagor and the mortgagee, with assistance from the foreclosure counseling agency, to address the breech of conditions and avoid foreclosure of the mortgage.

SECTION 4. Section 38 of Chapter 262 of the General Laws, as so appearing, are hereby further amended by adding after the last sentence the following new sentence:-

SECTION 5. Chapter 183C of the General Laws, as so appearing, is hereby further amended by inserting after Section 18 the following new Sections:-

Section 18A: Unfair and Deceptive High Cost Loan Advertising Practices

Not withstanding any other provisions to the contrary, it shall henceforth be considered a deceptive act or practice pursuant to section 2(a) of chapter 93A and chapters 167A and 167D to advertise the availability of mortgage financing unless a consumer warning or sufficient information is provided in the same advertisement to enable the consumer to determine whether or not the advertised financing would result in a high cost loan as defined in this chapter.

Advertising practices that shall be considered unfair and deceptive practices includes, but is not limited to the following:

(a) Advertising indicating the availability of instant mortgage financing approval or financing for persons with no credit or bad credit without disclosing how the terms of financing available to persons with impaired credit will differ from persons with a standard credit rating.

(b) Advertising indicating the availability of mortgage financing at a particular interest rate or monthly payment amount that does not also disclose and specify the term of the mortgage, the nature and amount of any change in interest rate and monthly payments in the first 5 years, any prepayment penalty or prohibition, and any negative amortization.

(c) Advertising availability of refinancing of pre-existing debt that will result in reduction of a borrower’s aggregate monthly payment without also disclosing any increase in the borrower’s aggregate number of monthly debt payments and any increase in the aggregate amount paid by the borrower over the term of the loan.

Section 18B. Mortgage Labeling.

Not withstanding any other provisions to the contrary, it shall henceforth be considered a deceptive act or practice pursuant to section 2(a) of chapter 93A and chapters 167A and 167D to provide mortgage financing unless the mortgagee also provided the borrower with a plain language summary of the estimated 10 year costs of the loan in a format proscribed by the Commissioner of Banks. This summary shall provide 1) the borrower with a calculation of the maximum monthly required minimum payment the borrower could face under the terms of the loan for each of the first ten years of the loan in order to keep the loan in good standing and 2) how much it would cost the buyer to payoff the loan at the end of each of the first ten years if the borrower makes the minimum required payments to keep the loan in good standing. If the borrower is receiving more than one loan, the summary must provide the same information for each loan separately and for the total of all of the loans together.

SECTION 7 The General Laws, as so appearing, are hereby further amended by inserting the following new Sections F after Chapter 255E: -

CHAPTER 255F. [MAC1] Licensing of Mortgage Loan Originators.

Section 1. Definitions.

As used in this chapter the following words shall have the following meanings:

“Division”, The Commonwealth of Massachusetts Division of Banks.

“Commissioner”, the Commissioner of the Division of Banks.

“Entity”, a person or entity that is a “bank” as defined under section 1 of chapter 167, or a “licensee” as defined under section 1 of chapter 255E, regulated by the Commonwealth of Massachusetts Division of Banks.

“Mortgage loan originator”, a natural person: (a) who is employed by or associated with one and not more than one entity as defined above; and (b) who solicits, provides or accepts mortgage loan applications, or assists consumers in completing such applications; and, (c) whose compensation for such activity is in any way based on a number or dollar volume of mortgage loan applications or mortgage loan closings, or other mortgage loan activity.

“Mortgage loan”, a loan to a natural person made primarily for personal, family or household purposes secured wholly or partially by a mortgage on residential property.

“Residential property”, real property located in the commonwealth having thereon a dwelling house with accommodations for four or less separate households and occupied, or to be occupied, in whole or in part by the obligor on the mortgage debt.

Section 2. Mortgage loan originator license requirement.

No natural person shall act as a mortgage loan originator unless such person has first obtained a mortgage loan originator license from the Commissioner. A natural person who meets the definition of a mortgage loan originator prior to enactment of this chapter 255F shall file an application and obtain a license from the Commissioner within one hundred eighty (180) days of the enactment of chapter 255F without being required to comply with Section 4(b) hereof. An entity shall not knowingly employ or retain a mortgage loan originator unless the mortgage loan originator is licensed hereunder.

Section 3. Rules and regulations.

The Commissioner may adopt, amend or repeal rules and regulations to aid in the administration and enforcement of this chapter.

Section 4. License application; residential mortgage lending course requirements.

(a) The application for a license shall be in writing and in the form prescribed by the Commissioner, signed under the pains and penalties of perjury, and shall contain the name and address of the entity with whom a mortgage loan originator is employed or associated and other information as the Commissioner may require, including evidence of compliance with subsection (b). Such application shall also include a description of the activities of the applicant, in such detail and for such periods, as the Commissioner may require, as well as such further information as the Commissioner may require. Each application for a license shall be accompanied by an investigation. Investigation and license fees shall be determined annually by the Commissioner of administration [MAC2] under the provisions of section 3B of chapter 7.

(b) An applicant shall (i) have completed a residential mortgage lending course accredited by the Commonwealth’s division of professional licensure and managed by the board of residential mortgage lending, not later than the two-year period immediately preceding the date of the application and (ii) provide evidence that the applicant has received a passing grade on the residential mortgage lending course examination administered by the board of mortgage lending within such two-year period.

Section 5. Issuance of license by Commissioner; notice of license denial; appeal.

If the Commissioner finds that the financial responsibility, character, reputation, integrity and general fitness of the applicant is such as to warrant belief that the applicant will act honestly, fairly, soundly and efficiently in the public interest consistent with the purposes of this chapter, he shall thereupon issue the applicant a license to engage in the business of a mortgage loan originator upon payment of the required fees. If the Commissioner shall not so find, he shall not issue a license and he shall notify the applicant of the denial. Within twenty (20) days thereafter, he shall enter upon his records a written decision and findings containing the reasons supporting the denial and shall forthwith give written notice thereof by registered mail to the applicant. Within thirty (30) days after the date of such notice, such appeal should be processed as a de novo appeal pursuant to chapter.30(a). The Commissioner shall approve or deny every application for a license within sixty days after the filing thereof, but any failure of the Commissioner to act within such period shall not be deemed to be an approval of any such application.

Section 6 Amount and use of license fees.

The fee for a mortgage originator license shall be not less than $150 but not more than $500. Not less than fifty percent of the revenue from said fee shall be retained by the division of banks for the implementation and enforcement of the requirement of this Act.

Section 7. Bonding requirements.

Each entity employing one or more mortgage loan originators shall obtain a mortgage originator license bond for each licensed mortgage loan originator employed by the entity.

Section 8. Information on license; changes; notice requirements.

Each license shall state the name and address of the mortgage loan originator licensee. The license shall be the property of the licensee and must be prominently posted at the place of business of the entity at which the mortgage originator is employed. In the event that the mortgage loan originator is no longer associated with or employed by the entity, both the entity and the mortgage loan originator are obligated to so notify the Commissioner. Such notice shall be in writing and provide such other information as the Commissioner may require. The licensee shall pay any fee required by the Commissioner to process the notice.

Section 9. License renewal.

Licenses shall expire annually. Each licensee shall, annually, on or before a date to be determined by the Commissioner, submit a license renewal application with the Commissioner. Said license renewal application shall be on a form prescribed by the Commissioner, signed under the pains and penalties or perjury, containing such information as said Commissioner may require, including evidence satisfactory to the Commissioner that the licensee has completed at least eight (8) hours of residential mortgage lending continuing education courses accredited by the Division of Professional Licensure and the Independent Board of Mortgage Lending during the year immediately preceding license renewal. Failure of the licensee to satisfy the continuing education requirement will render the mortgage loan originator ineligible for renewal and deemed to be inactive. A mortgage loan originator neglecting to file such application or failing to amend the same within fifteen days of notice from said Commissioner directing the same shall be deemed inactive. Inactive mortgage loan originators are prohibited from engaging in business as a mortgage loan originator.

Section 10. License suspension or revocation; notice and hearing.

The Commissioner may suspend, revoke or refuse to renew any license issued pursuant to this chapter if said Commissioner finds that: (a) the licensee has violated any provision of this chapter or any rule or regulation adopted hereunder, or any other law applicable to the conduct of its business; (b) any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the Commissioner in refusing to issue such license; or (c) the licensee has committed any fraud, misappropriated funds or misrepresented any of the material particulars of a mortgage loan transaction.

No license shall be revoked or suspended except after notice and a hearing thereon pursuant to chapter 30(a). Any order issued pursuant to this section shall be subject to de novo review as provided in chapter 30(a).

A licensee may surrender a license by delivering to the Commissioner written notice that it thereby surrenders such license, but such surrender shall not affect the civil or criminal liability of the licensee for acts committed before such surrender.

Section 11. Commissioner's order to cease and desist from unlawful act or practice; prior notice and opportunity for hearing; temporary order.

(a) If the Commissioner determines, after giving notice of and opportunity for a hearing, that a licensee has engaged in or is about to engage in an act or practice constituting a violation of a provision of this chapter or a rule, regulation or order hereunder, he may order such licensee to cease and desist from such unlawful act or practice and take such affirmative action as in his judgment will effect the purposes of this chapter.

(b) If the Commissioner makes written findings of fact that the public interest will be irreparably harmed by delay in issuing an order under subsection (a) he may issue a temporary cease and desist order. Upon the entry of a temporary cease and desist order, the Commissioner shall promptly notify, in writing, the licensee affected thereby that such order has been so entered, the reasons therefor, and that within twenty days after the receipt of a written request from such licensee, the matter will be scheduled for hearing to determine whether or not such temporary order shall become permanent and final. If no such hearing is requested and none is ordered by the Commissioner, the order shall remain in effect until it is modified or vacated by the Commissioner. If a hearing is requested or ordered, the Commissioner, after giving notice of and opportunity for a hearing to the licensee subject to said order, shall, by written finding of facts and conclusions of law, vacate, modify or make permanent the order.

(c) No order under this section, except an order issued pursuant to subsection (b), may be entered without prior notice of and opportunity for a hearing. The Commissioner may vacate or modify an order under this section upon finding that the conditions which required such an order have changed and that it is in the public interest to so vacate or modify.

Any order issued pursuant to this section shall be subject to de novo review as provided in chapter 30(a).

Section 12. Civil actions filed by Commissioner.

The Commissioner may enforce the provisions of this chapter, or restrain any violations thereof, by filing a civil action in any court of competent jurisdiction. Nothing herein shall be construed so as to create a private cause of action.

Section 13. Penalties.
Whoever violates any provision of section 2 of this chapter or any rule or regulation made thereunder by the Commissioner shall be punished by a fine of not more than five hundred dollars. Each day such violation occurs or continues shall be deemed a separate offense.

Section 14. Responsibilities of the Employing Entity.

The Commissioner may suspend, revoke or refuse to renew the license of the entity employing any licensed mortgage originator if said Commissioner finds that: (a) the entity was aware of or could reasonably have been expected to be aware that the licensee has violated any provision of this chapter or any rule or regulation adopted hereunder, or any other law applicable to the conduct of its business; (b) the entity was aware of any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the Commissioner in refusing to issue such license; or (c) the licensee has committed any fraud, misappropriated funds or misrepresented any of the material particulars of a mortgage loan transaction approved by the entity.

SECTION 8: Chapter 13 of the General Laws, as so appearing, are further amended by adding the following new sections:-

Section 98. Independent Board of Mortgage Lending.

There is hereby created an Independent Board of Mortgage Lending whose exclusive purpose shall be to (i) review residential mortgage lending course curricula for mortgage loan originators as defined in section 1 of chapter 255F to be offered or sponsored by any enterprise (including for profit or not for profit entities), recommend accreditation thereof by the Division of Professional Licensure, and issue certificates of completion thereof, and (ii) develop and administer a residential mortgage lending course examination. The board of mortgage lending shall consist of five persons who are residents of the commonwealth, of whom four shall be employed by an entity as defined in section 1 of Chapter 255F and have at least five (5) years’ experience in the residential mortgage loan industry, and one of whom shall be a representative of the public, subject to the provisions of section 9B [MAC3] . The members of said board shall be appointed in January of each year by the governor, for a term of three years from the first day of the following February. Any member of the board may be reappointed by the governor to serve successive terms.

Section 99. Independent Board of Mortgage Lending; organization; meetings.

The members of the board shall meet in February in each year at such time or place as they shall determine, and shall organize by electing from its own members a chairman and a secretary, who shall hold their respective offices for one year. The board shall hold regular meetings in February, May, August and November, and such additional meetings as it may determine, at such times and places as may be agreed upon by the members.

Section 100. Independent Board of Mortgage Lending; compensation and expenses.

Each member of the board shall serve without compensation, but shall be paid by the commonwealth the expenses necessarily incurred by him in the discharge of his official duties. The commonwealth shall provide the board with adequate office space and shall pay the expenses of the board incurred in the performance of its duties.