The Commonwealth of Massachusetts has historically been looked upon as a leader in consumer protection. As the Commissioner of Banks, I am pleased to continue with this tradition. This guide will help to familiarize you with the Mortgage Review Boards and the appeal process. These boards provide a valuable independent review process for denied applicants who believe that they were unfairly turned down for a mortgage. All mortgage lenders in Massachusetts are required to inform denied mortgage applicants of their right to appeal the denial to the Mortgage Review Boards. I encourage you to exercise your rights as a consumer when going through the mortgage process.
David J. Cotney, Commissioner of Banks
During the 1970's, the City of Boston established a Mortgage Review Board to examine denied loans for possible redlining. Mortgage lender participation with this Board and the review process was strictly voluntary. In the mid-1980's, under the jurisdiction of the Commissioner of Banks, this voluntary program was expanded statewide with the establishment of four regional Mortgage Review Boards. These boards were formally established by the Massachusetts Legislature in 1990 (Massachusetts General Laws Chapter 167, section 14A and now mandate that any mortgage lender making five or more mortgage loans in any calendar year on owner-occupied 1 -to- 4 family residential property located in Massachusetts is required to notify consumers of their right to appeal the denial of their mortgage applications to the Mortgage Review Boards.
The Mortgage Review Boards provide an independent review process for any mortgage applicant who has been denied. The Review Boards are comprised of lenders and community representatives appointed by the Commissioner of Banks. Board members are not compensated for serving on the Boards. Any Board member with a conflict of interest relative to a particular loan application is disqualified from the review. Also, Board members must disqualify themselves from consideration of any loan application to his/her employer.
The Commissioner of Banks appoints an employee of the Division of Banks to serve as the Administrative Secretary for the Mortgage Review Boards. The Administrative Secretary is responsible for receipt of appeals, requesting files and coordinating Board meetings. The meetings of the Board are private and any information concerning a particular applicant is kept strictly confidential. At the end of the meeting, all copies of loan files are collected by the Administrative Secretary and destroyed.
Frequently Asked Questions
What types of loans are eligible for review by the Mortgage Review Board?
The jurisdiction of the Board extends to denied applications for a first mortgage or to refinance an existing purchase mortgage on 1 -to- 4 family, owner occupied properties in Massachusetts.
What happens once I file an appeal?
When an appeal is received the Administrative Secretary will contact the lender requesting that copies of the entire loan package be forwarded to him/her at the Division of Banks. Once the loan package is received, it is presented to the Board at its next scheduled meeting for review. You will be notified by mail of Board's decision.
Who serves on the Mortgage review Boards?
Chapter 167, Section 14A of the Massachusetts General Laws provides that each Board shall consist of seven members appointed by the Commissioner of Banks, three of whom shall be community representatives and one of whom shall be a member of the public. At least five of the members shall either live or work with the respective region.
How many boards are there?
The statute provides that there shall be four regional Mortgage Review Boards operating in the Commonwealth. There is the Boston Metropolitan Area Mortgage Review Board which includes the counties of Suffolk, Essex, Middlesex, and Norfolk; the Southeastern Mortgage Review Board which includes the counties of Bristol. Plymouth, Barnstable, Dukes, and Nantucket; the Central Massachusetts Mortgage Review Board which includes Worcester County; and the Western Massachusetts Mortgage Review Board which includes the counties of Franklin, Hampden, Hampshire and Berkshire.
What happens during the Review Board Meetings?
The members of the Board will review each residential mortgage loan denial to determine if an applicant was denied on the basis of the location of the property. The Board will also review each residential mortgage denial to ensure that it was not denied on an unreasonable basis. Based on the information presented, the Board will vote to either agree with the lender's decision to deny the loan or will vote to recommend that the lender reconsider the loan request.
Will I have an opportunity to go before the Board when my loan is reviewed?
The Mortgage Review Board makes its decision based on the information contained in the lender's loan application file. Neither the applicant nor the lender are present during the Board meeting. However, the applicant can submit written material describing any circumstances or facts related to his/her application. These written materials will be included in the loan package presented to Board members.
How long does the appeals process take?
In the majority of cases, loans are reviewed by the Board within 45 days of receiving an appeal.
What happens if the board votes to agree with the lender's decision to deny my mortgage application?
This ends the matter at the Review Board Level. However, you have the right to seek judicial review of your application.
What other rights do I have if I still feel that my application was unreasonably denied?
After an appeal to the Board, an applicant who believes that he/she has been discriminated against on the basis of the location of the property, or on a basis that is arbitrary or unsupported by a reasonable analysis of the lending risks associated with a residential mortgage, may bring a civil action in the district court or housing court (where applicable) of the county in which the particular lender involved is located, in accordance with Massachusetts General Laws Chapter 183, section 64.
What rights do I have if I believe that my loan was denied on a prohibited basis?
An applicant who believes that his/her loan application was denied on a prohibited basis (i.e. on the basis of race, color, religion, national origin, ethnic origin, sex, marital status, age, income derived from public assistance, sexual orientation or handicap) may proceed independently of the Mortgage Review Board by contacting the Massachusetts Commission Against Discrimination.
If you have additional questions regarding the Mortgage Review Boards or the appeal process, please contact the CRA and Outreach Unit of the Division of Banks at (617) 956-1500 ext. 560. Outside the Metropolitan Boston area call 1-800-495-BANK (2265) or write to:
Mortgage Review Boards
Division of Banks
1000 Washington Street, 10th Floor
Boston, MA 02118-6400