On August 7, 2010, Chapter 258 of the Acts of 2010, An Act Relative to Mortgage Foreclosures ("Chapter 258" or "the Act") was signed into law.

150-Day Right To Cure After Default on Mortgage Loans: The Act extends the 90 day right to cure a default on a residential mortgage loan to 150 days unless the lender certified that it has engaged in a good faith effort to resolve the issue of the amounts due with the homeowner and the effort has included at least one meeting with the homeowner, the homeowner's attorney or the homeowner's representative. If, after that meeting, the parties cannot work out a resolution, the lender could begin foreclosure proceedings after a right to cure period of 90 days. Further, a borrower who fails to respond within 30 days of a mailed communication offering to negotiate a commercially reasonable alternative will be deemed to have forfeited the 150-day right to cure and will have a 90-day right to cure instead. The borrower can confirm response by confirmation of a fax to the creditor; proof of delivery by the postal service or similar carrier; or a record of a telephone call to the creditor captured on a telephone bill or pin register. The right to cure a default "shall be granted" only once during any 3 year period.

The 150 day right to cure provision expires on January 1, 2016, at which point the period reverts back to 90 days.

Reverse Mortgages: The Act prohibits a mortgagee from making a reverse mortgage unless the mortgagor affirmatively opts in writing, at or before the closing, for the reverse mortgage. Effective August 1, 2012, the Act will also require, prior to obtaining a reverse mortgage, certification of in-person counseling relative to the appropriateness of a reverse mortgage transaction from a counselor with a third party organization that has been approved by the Executive Office of Elder Affairs.

Tenant Protections in Foreclosed Properties: The new law establishes protections for tenants in foreclosed properties. For more information, please click here.

Rental Subsidy Under a Lease After Foreclosure: Chapter 206 of the Acts of 2007 established that the lease for a tenant whose rental payment is subsidized under state or federal law shall not be affected by a foreclosure sale. Chapter 258 clarifies that a foreclosing entity shall assume the lease and rental subsidy contract with the rent subsidiary administrator after foreclosure.

Mortgage Fraud: Chapter 258 establishes the crime of mortgage fraud in the Commonwealth for any person making material misstatements or material omissions knowing such statements or omissions to be false during the mortgage lending process with the intent that such statements be relied on by the mortgage lender, borrower or any other party in the mortgage lending process.

Tax Credit: The Act establishes a property tax exemption for real estate acquired through foreclosure and owned or held in trust by a charitable organization for creating community housing. The tax exemption does not extend beyond 7 years. This is a local option that would have to be adopted by each city or town.

For more information on Chapter 258, please <strong>click here</strong> .

<strong> <u>Chapter 258</u></strong> can be reviewed for other changes and effective dates.