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This opinion was issued in the second quarter of 2000.
A company is retained to accept and apply monthly mortgage payments on behalf of sellers of real estate that are financing the sale of the real estate. The company's activity would involve notice and receipt of the payments and then passing these payments on to the sellers. The company would not be making past due phone calls or giving late notices. If a customer did not make a payment, the company would simply inform the seller. The seller would then have to retain a separate entity for collection on the delinquent account. In addition the company would provide payoff statements to the borrowers and would provide billing and account status to the borrower.
Mass. Gen. Laws chapter 93, section 24 states, in part, that no person or entity may engage in the Commonwealth in the business of collecting or receiving payments for others of any account, bill or other indebtedness, or engage in soliciting the right to collect or receive payment for another of any account, bill indebtedness without first obtaining from the Commissioner of Banks a license to carry out said business. The Division's regulation at 209 CMR 18.03 defines a "Debt" as "money or its equivalent which is, or is alleged to be, more than 30 days past due and owing...". It is the position of the Division that a collection agency license is not required to perform the servicing activities, provided however, that the accounts being serviced do not fall within the definition of "Debt" as set forth in the Division's regulation 209 CMR 18.03.