The Division of Banks has proposed rules to implement a Massachusetts law enacted in 2010 that requires that notice be provided to residential borrowers in default of a right to cure the default. The Division has also proposed a regulation to clarify the opt-in and counselor certification requirements for in-person counseling required in connection with reverse mortgage loans by the same law, Chapter 258 of the Acts of 2010. Public hearings on both proposed regulations will be held by the Division on September 14. The proposed notice and right-to-cure regulation, 209 CMR 56.00, would establish the form of the right-to-cure notice as well as the information required to be included in the notice, and procedures to determine whether a 150-day notice or a 90-day notice is required and the method of delivery of the notice. The regulation would also allow a borrower to request from the entity foreclosing on the mortgage documentation evidencing that it is the holder of the mortgage or is authorized by the holder of the mortgage to foreclose. The proposed reverse mortgage regulation, 209 CMR 55.00, would establish the eligibility, procedures, disclosures and counseling requirements for a reverse mortgage program. Public comments on both regulations are due by September 21.

      Nutter Notes:  Chapter 258 of the Acts of 2010 amended the existing right-to-cure provisions of Chapter 244, Section 35A of the General Laws of Massachusetts to provide a mortgagor of a residential property with 150 days to cure a default of a required payment by full payment of all amounts that are due without acceleration of the maturity of the unpaid balance of the mortgage. The law also provides that a creditor may begin foreclosure proceedings after a right-to-cure period lasting only 90 days if the creditor has engaged in a good faith effort to negotiate a commercially reasonable alternative to foreclosure, including at least one meeting with the borrower in person or by telephone, and the borrower and the creditor were not successful in resolving their dispute. The law also requires that, to establish that a creditor has made a good faith effort to negotiate a commercially reasonable alternative to foreclosure, the creditor must consider, among other factors, an assessment of the borrower’s current circumstances, and the net present value of receiving payments pursuant to a modified mortgage loan as compared to the anticipated net recovery following foreclosure. The creditor is required to provide documentation of that effort to the borrower 10 days prior to meeting the borrower.