Clarification Of Notice Provisions - Q3 1999

By the Division of Banks

Notices are required to be provided to an applicant in a mortgage application and approval process under the provisions of Mass. Gen. Laws chapter 184, section 17D and its implementing regulation 209 CMR 38.00 et seq . Specifically, 209 CMR 38.04 requires a lender provide a borrower notice relative to the status of a mortgage application no later than 21 days from the date of the application. This notice may be an approval or denial of the application or an oral or written statement that the application is not substantially complete and what information is necessary to complete the application.

After a notice of incompleteness, pursuant to 209 CMR 38.04, the lender must inform a borrower when the application becomes complete. There is no time period referred to in the regulation for this subsequent notice of completeness. Furthermore, it is the position of the Division that after a lender provides the borrower with a notice of incomplete application, the lender has no further obligation under 209 CMR 38.04 to provide notice to the borrower unless the borrower submits information to complete the application. There is no time period, however, established in 209 CMR 38.04 during which the application may be deemed complete.