By the Division of Banks

License Requirements For Persons Offering Mortgage Reduction Programs

It has been the consistent position of the Division of Banks that mortgage reduction programs in which bi-weekly payments are forwarded to the mortgage holder in order to reduce the term of the existing mortgage are not governed by statute or regulation in Massachusetts. Such programs are a contractual matter between the borrower and the person or entity providing the mortgage reduction program and would be governed by the provisions of the contract. Since the borrower is not granting a mortgage on his or her principal residence under such programs, but is contracting for a method of payment, entities offering such programs which are otherwise not acting in the capacity of a mortgage broker would not be required to be licensed under Mass. Gen. Laws chapter 255E.