Collection Of Real Estate Taxes On Mortgage Loans - Q4 1998

By the Division of Banks

Mass. Gen. Laws chapter 171, section 65 mandates that a credit union collect a proportionate part of the estimated real estate taxes on mortgage loans. M.G.L. c. 171 § 65(6) authorizes the Board of Directors of the credit union to waive the requirement that the mortgagors pay their real estate taxes to the credit union. In order to waive this requirement, the mortgagor must make a formal, written request to have the requirement waived, and the credit union's credit committee must certify that the balance of the first mortgage loan is fifty percent or less of the value of the mortgaged property. The tax payment requirement may be waived only if the mortgagor meets the fifty percent requirement.