By the Division of Banks

Mortgage Lender And Collection Agency Licensing Requirements For Purchasers of Pre-Existing Mortgages

Mass. Gen. Laws chapter 255E sets forth the Commonwealth's mortgage lender licensing. It has been the consistent position of the Division that companies who are in the business of purchasing pre-existing mortgage obligations, and who do not make mortgage loans or issue commitments for mortgage loans, do not fall under the licensing requirements of said chapter 255E. Mass. Gen. Laws chapter 93, section 24 states that no person shall directly or indirectly conduct a collection agency or engage in the business of collecting or receiving payment for others of any account, bill or other indebtedness without first obtaining a license from the Commissioner of Banks. A company, such as the one described above, who is in the business of purchasing and servicing pre-existing mortgage obligations, who is collecting payments on its own behalf on the mortgages which it has purchased, and who is not collecting debts on behalf of another entity, would not have to be licensed as a collection agency in the Commonwealth.