On November 29, 2007, Governor Patrick signed Chapter 206 of the Acts of 2007, An Act Protecting and Preserving Home Ownership ("Chapter 206" or "the Act"), into law. Provisions of this landmark legislation include:

90-Day Right To Cure After Default on Mortgage Loans: The Act establishes a 90-day statutory Right To Cure a default on a 1-4 family, owner-occupied residential property in the Commonwealth and mandates the information to be included on this 90-day Notice of Right to Cure.

Please note that Chapter 258 of the Acts of 2010 extended the right to cure period to 150 days until January 1, 2016, at which point the right to cure period will revert back to 90 days.

Requirements for Adjustable or Variable Rate Subprime Mortgages: The Act prohibits a mortgage lender from making a subprime variable or adjustable rate mortgage loan to a first-time home loan borrower on 1-4 family, owner-occupied property in the Commonwealth unless the borrower affirmatively opts in writing for the variable or adjustable rate mortgage loan and receives certification from a non-profit housing counselor.

Protecting Tenants: One provision of Chapter 206 amends the tenancy-at-will statute to state that a tenancy-at-will in a dwelling unit is not terminated by a foreclosure sale. A second provision provides that a tenancy under a lease of a dwelling unit is converted to a tenancy-at-will after a foreclosure sale. Chapter 206 also establishes that the lease for a tenant whose rental payment is subsidized under state or federal law shall not be affected by a foreclosure sale.

Foreclosure Database: Chapter 206 requires the Division of Banks to maintain a foreclosure database relative to foreclosure activity by mortgage lenders, mortgage holders and mortgage servicers as well as mortgage brokers and loan originators who placed such mortgage loans in the Commonwealth.

Pilot Program for First-Time Home Buyers and Foreclosure Prevention: The Division of Banks and other agencies are required to develop a pilot program to identify best practices for financial institutions to provide first-time homebuyer loans, to provide for foreclosure prevention for at-risk homeowners, and to assist approved counseling programs with in-person counseling. The Act provided $2 million in grants for these programs.

Licensing of Loan Originators: Chapter 206 establishes a new chapter, Chapter 255F, in the General Laws, which creates a complete statutory framework for the licensing, examination and supervision of mortgage loan originators in the Commonwealth.

Community Reinvestment Act for Mortgage Lenders: The Act establishes a Community Reinvestment Act ("CRA") requirement for licensed mortgage lenders who make 50 or more home mortgage loans in the previous calendar year. This provision will lead to more responsible lending.

Switching from an Adjustable Rate to a Fixed Rate Mortgage: The new law allows for an adjustable rate mortgage loan to be changed to a fixed rate mortgage loan for a charge of up to 1% of the mortgage amount.

Increased Penalties for Violations by Mortgage Lenders and Mortgage Brokers: One provision of Chapter 206 increases the penalties for violations of General Laws chapter 255E, the mortgage broker and lender statute.

Chapter 206 can be reviewed for other changes and effective dates.