Licensing Requirements For Servicers Of Mortgage Loans - Q1 1999

The subsidiary of a national banking association inquires as to whether it is required to be licensed as a collection agency in order to service loans in the Commonwealth. In the event a mortgage loan becomes more than 30 days past due, the loan would become a "debt" under Massachusetts law. Mass. Gen. Laws chapter 93, section 24 prohibits any person or entity from collecting debts on behalf of another unless it is licensed as a collection agency in the Commonwealth. Although said section 24 contains certain exemptions from licensing, there is no exemption for a national bank located outside the Commonwealth, the subsidiary of a national bank, or a mortgage servicer. It is the position of the Division, that a mortgage servicer would be required to be licensed as a collection agency to collect payments on mortgage loans which are more than 30 days past due in the Commonwealth.