Proposed Amendments to 209 CMR 18.00: Conduct of the Business of Debt Collectors and Loan Servicers

Pursuant to the provisions of Massachusetts General Laws chapter 93, section 24A, and in accordance with Massachusetts General Laws chapter 30A, section 2, a public hearing will be held on Thursday, November 29, 2012 at 10:30 a.m., 1000 Washington Street,, Hearing Room 1-E, Boston, Massachusetts, at which oral comments will be received by the Division of Banks relative to the adoption of proposed amendments to 209 CMR 18.00: Conduct of the Business of Debt Collectors and Loan Servicers.

The proposed amendments would provide additional consumer protections governing mortgage loan servicing practices of third party loan servicers by requiring third party loan servicers to: investigate all available loss mitigation options prior to foreclosure; follow detailed loan modification procedures requiring timely communication with borrowers; identify a single point of contact for borrowers; ensure all foreclosure-related documents are properly prepared and executed based on personal knowledge and that the foreclosing party has the right to foreclose; and provide adequate oversight of third party providers including law firms and other vendors. The amendments would also prohibit third party loan servicers from initiating foreclosure proceedings when an application for any loss mitigation program is pending. These amendments would amend the definition of "debt collector" to include so-called "active debt buyers", would clarify the definition of net worth for debt collectors, and would expand the limitations on contact with a consumer by a debt collector to include cellular telephone and text messaging. The amendments also expand the number of significant events of a debt collector and third party loan servicer which must be reported to the Division. Other changes, certain technical changes and clarifications are also being made to the existing regulations. Additional changes may be made based on comments received at the public hearing or during the comment period.

Written comments may be submitted to the Division on the proposed amendments until 5:00 p.m. on Thursday, December 6, 2012. A copy of the proposed amendments is available at, and copies may be obtained from, the Massachusetts Division of Banks, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118-6400 or at www.mass.gov/dob.