Opinion  Summary of Selected Opinion 00-087

Date:	07/01/2000
Organization:	Division of Banks
Docket Number:	00-087

This opinion was issued in the third quarter of the year 2000

Credit unions right to select an attorney on their behalf in a mortgage transaction

There is no statute or regulation in Massachusetts which establishes a uniform policy concerning the use of closing attorneys by lending institutions, including banks and credit unions, in the Commonwealth. Lending institutions are free to establish their own policies concerning the utilization of closing attorney from the list while other lenders use one or a few firms to conduct all loan closings. The Division views the use of closing attorneys to be within the complete discretion of management of the institution.

The Division would also point out the Massachusetts General Laws chapter 184, section 17B requires that every application for a mortgage loan have two statements printed on the application stating that the responsibility of the attorney for the mortgagee is to protect the interest of the mortgagee and that the mortgagor at his own expense, may engage an attorney of his own at his own expense. Said section 17B is intended to provide notice to the borrower that the borrower is responsible for the cost of the lender's attorney in a mortgage transaction. Massachusetts General Laws chapter 93, section 70 provides certain protections for consumers for the title work done by a lender's attorney. It is the conclusion of the Division that the Credit Union has the right to select the attorney who will act on behalf of the Credit Union in a mortgage transaction.