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This is an unofficial version of Commonwealth regulations and is posted here for the convenience of the public. It is not an official statement of the regulations.
The purpose of 209 CMR 56.00 is to define the Right to Cure notification process for lenders and mortgage servicers to be followed in notifying borrowers of a mortgage default, and in disclosing repayment options available to the borrower in order to prevent a foreclosure. 209 CMR 56.00 also implements standards and requirements for the mortgage loan modification process for loans qualifying as certain mortgage loans in order to avoid unnecessary foreclosures.
For purposes of 209 CMR 56.00, the following definitions apply:
Affordable Monthly Payment means the monthly payments on a mortgage loan, which, taking into account the borrower’s current circumstances, including verifiable gross monthly income, debts, assets and obligations enable a borrower to make the payments in accordance with the affordability guidelines and standards set forth under at least one of the defined modified mortgage loan programs.
Borrower means a mortgagor of a mortgage loan.
Certain Mortgage Loan means a loan to a natural person made primarily for personal, family or household purposes secured wholly or partially by a mortgage on an owner-occupied residential property with one or more of the following loan features:
a. An introductory interest rate granted for a period of three years or less and such introductory rate is at least 2% lower than the fully indexed rate;
b. Interest-only payments for any period of time, except in the case where the mortgage loan is an open-end home equity line of credit or is a construction loan;
provided, however, that a loan shall be a certain mortgage loan if, after the performance of reasonable due diligence, a creditor is unable to determine whether the loan has one or more of the loan features in 209 CMR 56.02: Certain Mortgage Loan(a) to (g); and provided, further, that loans financed by the Massachusetts Housing Finance Agency, established in St. 1966, c. 708 and loans originated through programs administered by the Massachusetts Housing Partnership Fund board established in St. 1985, c. 405, § 35 shall not be certain mortgage loans.
Creditor means a person or entity that holds or controls, partially, wholly, indirectly, directly, or in a nominee capacity, a mortgage loan securing an owner-occupied residential property, including, but not limited to, an originator, holder, investor, assignee, successor, trust, trustee, nominee holder, Mortgage Electronic Registration System or mortgage servicer, including the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. Creditor shall also include any servant, employee or agent of a creditor.
Creditor’s Representative means a person who has the authority to negotiate and approve the terms of and modify a mortgage loan, or a person who, under a servicing agreement, has the authority to negotiate and approve the terms of and modify a mortgage loan.
Full Documentation means a mortgage program requiring verifiable documentation of borrower’s income, assets and financial obligations to perform an analysis of borrower eligibility for a mortgage loan. Notwithstanding the documentation standards provided under a full documentation loan, a ‘streamlined refinance loan’ of a mortgage loan insured by the Federal Housing Administration, or originated in accordance with guidelines published by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association, shall meet the definition of full documentation.
Fully Indexed Rate means the interest rate on an adjustable-rate mortgage calculated as the index rate prevailing at origination plus the margin to be added to it after the expiration of an introductory interest rate.
Modified Mortgage Loan means a mortgage loan modified from its original terms including, but not limited to, a loan modified pursuant to one of the following:
Mortgagee means a person or entity to whom property is mortgaged, the mortgage creditor or lender including, but not limited to, mortgage servicers, lenders in a mortgage agreement and any agent, servant or employee of the mortgagee or any successor in interest or assignee of the mortgagee’s rights, interests or obligations under the mortgage agreement.
Mortgage Loan means a loan to a natural person made primarily for personal, family or household purposes secured wholly or partially by a mortgage on residential property.
Mortgage Servicer means a person or entity which administers or at any point administered the mortgage; provided, however, that such administration shall include, but not be limited to, calculating principal and interest, collecting payments from the borrower, acting as escrow agent or foreclosing in the event of a default.
Net Present Value means the present net value of a residential property based on a calculation using one of the following:
Residential Property means real property located in the Commonwealth having thereon a dwelling house with accommodations for four or less separate households and occupied, or to be occupied, in whole or in part by the borrower; provided, however, that residential property shall be limited to the principal residence of a person; provided further, that residential property shall not include an investment property or residence other than a primary residence; and provided further, that residential property shall not include residential property taken in whole or in part as collateral for a commercial loan; and provided further, that for the purpose of determining whether a loan is a certain mortgage loan, residential property shall not include a property subject to condemnation or receivership.
(a) Pursuant to M.G.L. c. 244 § 35A(b), the mortgagee shall deliver the Right to Cure Notice to the borrower by:
(b) The Right to Cure Notice may be provided to a borrower in default with the written notice issued pursuant to 12 CFR 1024.39(b), if included as a separate document and delivered in accordance with 209 CMR 56.03(3)(a).
In accordance with 209 CMR 56.03, the “90-Day Right to Cure Your Mortgage Default” notice must conform to the following:
90-Day Right to Cure Your Mortgage Default
[POSTAL DELIVERY METHOD]
[City, ST ZIP Code]
RE: [PROPERTY ADDRESS]; loan [ACCOUNT NO.] with [MORTGAGEE]; [MORTGAGE BROKER/LOAN ORIGINATOR, if applicable]
To [NAME OF BORROWER/S]:
We are contacting you because you did not make your monthly loan payment[s] due on [MORTGAGE PAYMENT DUE DATE/S] to [MORTGAGEE]. You must pay the past due amount of [PAYABLE AMOUNT] on or before [90 DAY EXPIRATION DATE], which is 90 days from the date of this notice. The past due amount on the date of this notice is specified below:
If you pay the past due amount, and any additional monthly payments, late charges or fees that may become due between the date of this notice and the date when you make your payment, your account will be considered up-to-date and you can continue to make your regular monthly payments.
Make your payment directly to:
[INCLUDE THE NAME OF PAYMENT CONTACT, DEPARTMENT AND ADDRESS at the MORTGAGEE’S LOCATION].
Please consider the following:
If you do not pay the total past due amount of [PAYABLE AMOUNT] and any additional payments that may become due by [90 DAY EXPIRATION DATE], you may be evicted from your home after a foreclosure sale. If [MORTGAGEE] forecloses on this property, it means the mortgagee or a new buyer will take over the ownership of your home.
If you have questions, or disagree with the calculation of your past due balance, please contact [MORTGAGEE] at [LOCAL OR TOLL FREE TELEPHONE NUMBER, EXTENSION NUMBER] or [ADDRESS].
Enclosed with this notice, there may be additional important disclosures related to applicable laws and requirements that you should carefully review.
a. A creditor shall request a statement of the borrower’s income and a complete list of debts and obligations concurrently with the Right to Request a Modified Mortgage Loan Notice. A creditor may use the Required Documents for Loan Modification Application form under 209 CMR 56.10 or other similar form.
b. A copy of the Right to Request a Modified Mortgage Loan Notice shall be filed with the Office of the Attorney General.
a. The creditor shall deliver the Right to Request a Modified Mortgage Loan Notice to the borrower by:
b. The Right to Request a Modified Mortgage Loan Notice may be provided to a borrower in default with the written notice issued pursuant to 12 CFR 1024.39(b), if included as a separate document and delivered in accordance with 209 CMR 56.05(3)(a).
4. Authorization to Send the Notice. A creditor may not send the Right to Request a Modified Mortgage Loan Notice under 209 CMR 56.05(1) unless it has been authorized to collect on the default.
(5) Borrower’s Response to the Notice. The borrower shall notify the creditor of the mortgage modification option selected by the borrower within 30 days following delivery of the notice to the borrower, in accordance with 209 CMR 56.06(1).
(6) Creditor’s Response to Borrower’s Request for Modification. Not more than 30 days following receipt of a borrower’s notification that the borrower intends to request a mortgage loan modification and a completed loan modification application pursuant to 209 CMR 56.06(1), or following receipt of the later of the notification or application if submitted separately, a creditor shall provide the borrower with a written assessment of the borrower’s ability to make an affordable monthly payment. This assessment shall include the following:
a. A written statement of the borrower’s income, debts, assets and obligations as determined by the creditor;
b. The creditor’s net present value analysis of a modified mortgage loan;
c. The creditor’s anticipated net recovery at foreclosure;
d. A statement of the interests of the creditor; and
A modified mortgage loan offer or a notice that no modified mortgage loan will be offered.
(7) Modified Mortgage Loan Offer. If a creditor offers a modified mortgage loan, the creditor shall provide the borrower with the first and last names and contact phone numbers of not more than two creditor’s representatives responsible for implementing the modified mortgage loan offer. A creditor shall be presumed to have provided the written assessment to the borrower if the creditor provides proof of delivery through the United States Postal Service or similar carrier.
(8) Response to Modified Mortgage Loan Offer. A borrower who receives a modified mortgage loan offer from a creditor shall respond within 30 days from the receipt of the modified mortgage loan offer.
(a) The borrower may:
a. accept the offer of a loan modification;
b. make a reasonable counteroffer; or
c. waive the period of time remaining relative to the borrower’s right to cure, if any, and proceed to foreclosure.
b. The borrower’s response shall be in writing, and, if a counteroffer is proposed, shall include substantiating documentation in support of the counteroffer.
c. Where a counteroffer is proposed by a borrower, a creditor shall accept, reject or propose a counteroffer to the borrower within 30 days of receipt of the counteroffer.
(9) Semi-annual Reporting Requirement. A creditor shall report, on a semi-annual basis, to the Division of Banks the final outcome of each mortgage loan modification on all mortgage loans for which the creditor sent to a borrower a notice of the right to request a modified mortgage loan.
A borrower shall be deemed to have made a good faith effort to respond to a creditor’s notice of the borrower’s right to request a mortgage loan modification if, within 30 days of the creditor’s notice being sent, the borrower provides the creditor with the following:
(1) Mortgage Modification Options. A completed Mortgage Modification Options form selecting one of the available loan modification, foreclosure alternative, or waiver options set forth on the form. A borrower that requests a loan modification must also provide a completed loan modification application.
(2) Receipt of Loan Modification Application. A completed loan modification application means an application in connection with which the creditor has received all of the documents and information that the creditor requires from a borrower in evaluating applications for a modified mortgage loan.
(3) Delivery of Mortgage Modification Options Form. A borrower shall deliver the completed Mortgage Modification Options form and, if applicable, a completed loan modification application, to the creditor by:
a. Hand-delivery; or
b. First class and certified mail or similar service provided by a private carrier.
(4) Alternate Methods of Delivery of Mortgage Modification Options Form. A borrower may deliver the Mortgage Modification Options form and loan modification application to the creditor by methods other than those set forth in 209 CMR 56.06(3); however, use of any such alternate delivery method is not presumed to notify the creditor absent actual receipt by the creditor.
A creditor shall be presumed to have acted in good faith to avoid foreclosure if, prior to causing publication of notice of a foreclosure sale, the creditor satisfies the provisions of M.G.L. c. 244, § 35B(b)(2) and further completes the following:
a. The determination of the borrower’s income, debts, assets and obligations; or
b. The creditor’s net present value analysis of the borrower’s mortgage loan;
Safe Harbor. A creditor satisfies the requirements of M.G.L. c. 244, § 35B(b) for a certain mortgage loan, without issuing the required notice and written assessment, if the creditor can demonstrate one of the following:
In accordance with 209 CMR 56.05, the Right to Request a Modified Mortgage Loan notice must conform to the following:
RIGHT TO REQUEST A MODIFIED MORTGAGE LOAN
RE: [PROPERTY ADDRESS]; loan [ACCOUNT NO.] with [CREDITOR]:
We are contacting you because our records indicate that you are eligible to request a modification of your mortgage with [CREDITOR]. If you want to request a loan modification or other foreclosure alternative option, you must complete and return the enclosed Mortgage Modification Options form along with any supporting information no later than [30 DAYS FROM DATE THIS NOTICE WAS SENT]. The Mortgage Modification Options form and any supporting documents must be returned by certified mail or similar service to [CREDITOR]. We will respond to your request within 30 days of its receipt.
Please be aware this notice of Right to Request a Modified Mortgage Loan is different from the Right to Cure Your Mortgage Default notice that you may have already received. The enclosed Mortgage Modification Options form provides you with four choices. These choices impact the options under the Right to Cure notice and should be carefully considered. If you do not want to request a loan modification, you must still return the enclosed Mortgage Modification Options form. Please keep a copy of everything you send to us and keep proof of mailing the materials to us.
If you do not return the enclosed Mortgage Modification Options form and a completed loan modification application by [30 DAYS FROM DATE THIS NOTICE WAS SENT] your right to cure your mortgage default will end on [90 days from the date the Right to Cure notice was sent].
If you have questions, please contact [CREDITOR] at [LOCAL OR TOLL FREE TELEPHONE NUMBER, EXTENSION NUMBER] or [ADDRESS]. If you would like assistance from the Attorney General’s Office, you may contact the HomeCorps hotline at 617-573-5333 to speak with a loan modification specialist who can assist you. We suggest you mention this notice when you call.
[Name of Signer]
[Title of Signer]
MORTGAGE MODIFICATION OPTIONS
You must return this form in the enclosed envelope by [30 DAYS FROM DATE NOTICE WAS SENT]
RE: [PROPERTY ADDRESS]; loan [ACCOUNT NO.] with [CREDITOR]
You must check one of the following boxes to notify [CREDITOR] of how you would like to proceed.
Borrower Name Date
Borrower Telephone Number
REQUIRED DOCUMENTS FOR LOAN MODIFICATION APPLICATION
Notice: Alimony, child support or separation maintenance payments need not be disclosed if you do not choose to have it considered for repaying your mortgage debt.