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Note: This regulation is effective on March 2, 2012, but the "Right to Cure Your Mortgage Default" notice set forth in 209 CMR 56.04 may be used on a voluntary basis until May 21, 2012. The notice will become mandatory on Monday, May 21, 2012.
209 CMR 56:00 RIGHT TO CURE A MORTGAGE DEFAULT
56.01 Authority, Purpose and Scope
56.03 Right to Cure Notice: Content Requirements
56.04 Right to Cure Notice
56.01: Authority, Purpose and Scope
(1) Authority: 209 CMR 56.00 is issued pursuant to M.G.L. c. 244, § 35A.
(2) Purpose and Scope: The purpose of 209 CMR 56.00 is to provide a standardized process for the Right to Cure notification for lenders and/or servicers to inform borrowers of a mortgage default, and when disclosing repayment options in order to prevent a foreclosure. Additionally, 209 CMR 56.00 includes the form to be used by the mortgagee or mortgage servicer when a Right to Cure notice is delivered to a borrower.
For purposes of 209 CMR 56.00, the following definitions apply:
Borrower: a mortgagor of a mortgage loan.
Borrower’s Representative: an employee or contractor of a nonprofit organization certified by Housing and Urban Development, an employee or contractor of a foreclosure education center pursuant to Section 16 of Chapter 206 of the Acts of 2007 or an employee or contractor of a counseling agency receiving a Collaborative Seal of Approval from the Massachusetts Homeownership Collaborative administered by the Citizens’ Housing and Planning Association.
Creditor: a person or entity that holds or controls, partially, wholly, indirectly, directly, or in a nominee capacity, a mortgage loan securing a residential property, including, without limitation, an originator, holder, investor, assignee, successor, trust, trustee, nominee holder, Mortgage Electronic Registration System or mortgage servicer, including the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. "Creditor" shall also include any servant, employee or agent of a creditor.
Good Faith Effort to Negotiate a Commercially Reasonable Alternative to Foreclosure: the creditor must consider: (i) an assessment of the borrower’s current circumstances including, without limitation, the borrower’s current income, debts and obligations; (ii) the net present value of receiving payments pursuant to a modified mortgage loan as compared to the anticipated net recovery following foreclosure; and (iii) the interests of the creditor; provided however, that a creditor shall not be prohibited from considering other factors.
Modified Mortgage Loan: a mortgage modified from its original terms including, but not limited to, a loan modified pursuant to one of the following: (i) the Home Affordable Modification Program; (ii) the Federal Deposit Insurance Corporation’s Loan Modification Program; (iii) for any modification program that a lender uses which is based on accepted principles and the safety and soundness of the institution and recognized by the National Credit Union Administration, the Division of Banks or any other instrumentality of the Commonwealth; (iv) the Federal Housing Agency; or (v) a similar federal refinance plan.
Mortgagee: an entity to whom property is mortgaged, the mortgage creditor or lender including, but not limited to, mortgage servicers, lenders in a mortgage agreement and any agent, servant or employee of the mortgagee or any successor in interest or assignee of the mortgagee’s rights, interests or obligations under the mortgage agreement.
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.
Mortgage Servicer: an entity which administers or at any point administered the mortgage; provided, however that such administration shall include, but not be limited to, calculating principal and interest, collecting payments from the mortgagor, acting as escrow agent or foreclosing in the event of a default.
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; provided, however, that residential property shall be limited to the principal residence of a person; provided further, that residential property shall not include an investment property or residence other than a primary residence; and provided further, that residential property shall not include residential property taken in whole or in part as collateral for a commercial loan.
56.03: Right to Cure Notice: Content Requirements
(1) 150 Day Right to Cure Notice. A mortgagee must send a 150 Day Right to Cure Notice that strictly conforms to the "(150 Day) Right to Cure Your Mortgage Default" form, under 209 CMR 56.04, unless it has met the requirements for a Right to Cure Notice lasting less than 150 days, described under 209 CMR 56.03(2).
(2) 90 Day Right to Cure Notice. In accordance with M.G.L c. 244 § 35A (b), a mortgagee may send a 90 Day Right to Cure Notice that strictly conforms to the "(90 Day) Right to Cure Your Mortgage Default" form, provided under 56.04, if it meets the following requirements:
(a) demonstrates a good faith effort to resolve the mortgage default by certifying:
(i) it has engaged in a good faith effort to negotiate a commercially reasonable alternative to foreclosure;
(ii) it has been involved in at least one meeting, either in person or by telephone, between a creditor’s representative and the borrower, the borrower’s attorney or the borrower’s representative and the creditor has provided the borrower by first class and certified mail with documentation of a good faith effort 10 days prior to said meeting; and
(iii) after such meeting, described under (ii), the creditor must be able to evidence that the borrower and the creditor were not successful in resolving their dispute; or
(b) demonstrates the borrower’s failure to respond within 30 days to any mailed communications offering to negotiate a commercially reasonable alternative to foreclosure, as set forth under 209 CMR 56.03(2)(a). Such failure to respond by the borrower shall result in the borrower forfeiting his right to a 150 day right to cure period and shall be subject to a right to cure period lasting 90 days.
(c) A mortgagee must demonstrate compliance with 209 CMR 56.03(2)(a) or (b), when opting to send a right to cure notice lasting less than 150 days, by including a copy of the compliance affidavit, required under M.G.L. c. 244 § 35A (f), with said notice to borrower.
(3) Borrower eligibility. The right to cure a default shall be granted to a borrower once during any three (3) year period, regardless of mortgage holder.
(4) Delivery. Pursuant to M.G.L. c. 244 §35A(g), the mortgagee or mortgage servicer shall deliver the Right to Cure Notice to the mortgagor by:
(a) hand-delivery; or
(b) by first-class and certified mail or similar service provided by a private carrier to the mortgagor at the address last known to the mortgagee or anyone holding thereunder.
(5) Authorization to Send the Right to Cure Notice. A mortgagee may not send the Right to Cure Notice under 209 CMR 56.03 (1) or (2), unless it has been authorized to collect on the default.
(6) Authorization to Accelerate, Foreclose or Seize the Home through Foreclosure. The mortgagee or anyone holding thereunder, may take steps to terminate the mortgagor’s ownership in the property by acceleration of the mortgage, a foreclosure proceeding or other action to seize the home, if the mortgagor does not cure the default by the date specified on the Right to Cure Notice. Furthermore, in accordance with M.G.L. c. 244 § 35A, subsection (j), the mortgagee, or anyone holding thereunder, shall file a copy of the Right to Cure notice and an affidavit demonstrating compliance with M.G.L. c. 244 s.35A, in any action or proceeding to foreclose on such residential property.
(7) Enforcement of the Mandatory "Right to Cure Your Mortgage Default" Notice. The (150/90) Day "Right to Cure Your Mortgage Default" notice set forth in 209 CMR 56.04 may be used on a voluntary basis until May 21, 2012. The notice will become mandatory on May 21, 2012, and must strictly conform with 209 CMR 56.04.
56.04: In accordance with 209 CMR 56.03, the (150 / 90 Day)"Right to Cure Your Mortgage Default" notice must strictly conform to the following:
[150 / 90 Day] Right to Cure Your Mortgage Default
[POSTAL DELIVERY METHOD]
[City, ST ZIP Code]
RE: [PROPERTY ADDRESS]; loan [ACCOUNT NO.] with [ MORTGAGEE]; [MORTGAGE BROKER/LOAN ORIGINATOR: if applicable]
To [NAME OF BORROWER/S]:
We are contacting you because you did not make your monthly loan payment[s] due on [MORTGAGE PAYMENT DUE DATE/S] to [MORTGAGEE]. You must pay the past due amount of [PAYABLE AMOUNT] on or before [150 / 90 DAY EXPIRATION DATE], which is [NUMBER OF CURING DAYS] days from the date of this notice. The past due amount on the date of this notice is specified below:
- [UNPAID MORTGAGE PAYMENTS AND DELINQUENCY DATES]
- [INTEREST ACCRUED/PER DIEM INTEREST]
- [APPLICABLE UNPAID ESCROW CONTRIBUTIONS]
- [OTHER LATE CHARGES OR FEES]
If you pay the past due amount, and any additional monthly payments, late charges or fees that may become due between the date of this notice and the date when you make your payment, your account will be considered up-to-date and you can continue to make your regular monthly payments.
Make your payment directly to:
[INCLUDE THE NAME OF PAYMENT CONTACT, DEPARTMENT AND ADDRESS at the MORTGAGEE’S LOCATION].
Please consider the following:
- you should contact the Homeownership Preservation Foundation (888-995-HOPE) to speak with counselors who can provide assistance and may be able to help you work with your lender to avoid foreclosure. There may be other homeownership assistance available through your lender or servicer;
- you may also contact the Division of Banks (617-956-1500) or visit www.mass.gov/foreclosures to find a foreclosure prevention program near you;
- after [150 / 90 DAY: EXPIRATION DATE], you can still avoid foreclosure by paying the total past due amount before a foreclosure sale takes place. Depending on the terms of the loan, there may also be other ways to avoid foreclosure, such as selling your property, refinancing your loan, or voluntarily transferring ownership of the property to [MORTGAGEE].
If you do not pay the total past due amount of [PAYABLE AMOUNT] and any additional payments that may become due by [150 / 90 DAY: EXPIRATION DATE], you may be evicted from your home after a foreclosure sale. If [MORTGAGEE] forecloses on this property, it means the mortgagee or a new buyer will take over the ownership of your home.
If you have questions, or disagree with the calculation of your past due balance, please contact [MORTGAGEE] at [LOCAL OR TOLL FREE TELEPHONE NUMBER, EXTENSION NUMBER] or [ADDRESS].
Enclosed with this notice, there may be additional important disclosures related to applicable laws and requirements that you should carefully review.
M.G.L. c. 244, § 35A.
209 CMR 56.00: Right to Cure A Mortgage Default
Clarification of Use of Chinese Language in Introductory Language
August 10, 2012
The Division has become aware that on its website, in the statutory declaration in the box (the "Declaration") two versions have appeared in Chinese. The Division has determined that the two versions are essentially translated the same. Currently, use of either version of the Chinese language in the Declaration in the Right to Cure Notice is deemed to be in compliance with the regulation for now. However, the Division has determined that the Chinese language in the Declaration that appeared in Massachusetts Register on March 30, 2012, is the preferred version for reading in Chinese. Accordingly, going forward, if new forms are being published, or documents are being updated, the version of the Chinese language to use in the Declaration is as it appears in the Massachusetts Register on March 30, 2012 and on the Division's website as of August 10, 2012.
Please note that the Division has already posted the version to use going forward in the Declaration on its website in the following three places: Frequently Asked Questions, the Sample Notice, and the version of 209 CMR 56.04 posted under News & Updates that was posted for the week beginning March 4, 2012.
As noted above, it is the position of the Division that any Right to Cure Notice published and being used that includes the Chinese version in the Declaration that was previously posted on the Division's website in the above three locations is deemed to be in compliance until supplies are exhausted. When new copies of the Right to Cure Notice are ordered, the new copies are to include the version now appearing in the Declaration.