Background
A sunset provision governing the written notice of a right to cure a default under a residential mortgage loan (Right to Cure Notice) took effect on January 1, 2016. The sunset provision was included in SECTION 14 of Chapter 258 of the Acts of 2010 as an amendment to M.G.L. c. 244, §35A. The January 1st amendments to the law governing the Right to Cure Notice included, but were not limited to, the reduction of the right to cure period from 150 days to 90 days. Provided below are responses to several questions relating to the recent revisions to the requirements for the Right to Cure Notice.
When does M.G.L. c. 244, §35A revert back to the original language requiring a 90-day right to cure rather than 150 days?
Effective January 1, 2016, the right to cure a default of a required payment under a residential mortgage or note secured by a residential property was reduced from a period of 150 days to 90 days pursuant to M.G.L. c. 244, §35A. As of January 1, 2016, a mortgagee, or anyone holding thereunder, must provide a written notice in accordance with M.G.L. c. 244, §35A(c) to the mortgagor at least 90 days prior to accelerating the unpaid balance of such mortgage or otherwise proceeding with a foreclosure due to such payment default.
Will the DOB permit the mortgagee to modify the content of the Right to Cure Notice to reflect the reversion to a 90-day right to cure period?
Yes, for the period between January 1, 2016 and the effective date of any amendments to 209 CMR 56.04, the DOB would deem a mortgagee’s use of the Right to Cure Notice available here to be compliant with 209 CMR 56.04.
For illustrative purposes, a copy of the updated Right to Cure Notice tracking the provisions of the Right to Cure Notice that have been revised with the release of these Frequently Asked Questions can be reviewed here.
Will the DOB be proposing any changes in addition to the change in cure period to the existing Right to Cure Notice under 209 CMR 56.04?
Yes, additional revisions were included in the changes to M.G.L. c. 244, §35A which became effective on January 1, 2016 and will require further revisions to the Right to Cure Notice required under 209 CMR 56.04.
The updates to the Right to Cure Notice were included in the amendments to 209 CMR 56.00 which became effective on December 16, 2016.
May a mortgage servicer issue the Right to Cure Notice to the mortgagor on behalf of the mortgagee?
Yes, a mortgagee, or mortgage servicer, or any entity authorized to act on behalf of the mortgagee may issue the Right to Cure Notice to the mortgagor.
Will the changes to M.G.L. c. 244, §35A require revisions to the notice of the right to request a modified mortgage loan required under M.G.L. c. 244, §35B(c)?
Yes. Effective January 1, 2016, the right to cure a default of a required payment under a residential mortgage or note secured by a residential property will be reduced from a period of 150 days to 90 days for all mortgagors, including individuals who are identified as Certain Mortgage Loan borrowers under M.G.L. c. 244, §35B(a). To eliminate potential confusion, the Right to Request a Modified Mortgage Loan Notice provided pursuant to 209 CMR 56.09, and the accompanying Mortgage Modifications Options Form, should be updated to notify the borrower of the 90-day Right to Cure and eliminate references to a 150-day period to cure the payment default.
For the period between January 1, 2016 and the effective date of any amendments to 209 CMR 56.09, the DOB would deem a creditor’s use of the Right to Request a Modified Mortgage Loan Notice available here to be compliant with 209 CMR 56.09.
For illustrative purposes, a copy of the updated Right to Request a Modified Mortgage Loan Notice tracking the provisions of the notice that have been revised with the release of these Frequently Asked Questions can be reviewed here.
Although the Right to Cure period is reduced to 90 days, the process for determining whether a modified mortgage loan is offered to a Certain Mortgage Loan borrower under M.G.L. c. 244, §35B should continue to be completed within a period of 150 days.