ADVOCACY E-NEWS

NOVEMBER 2007 

Foreclosure Prevention Bill awaits Governor's Signature 

• Creates the first in the country CRA for mortgage companies.  Provides for monitoring and oversight of mortgage lenders by the Division of Banks (DOB). Lenders of 50 or more home mortgage loans will be rated on their practices in assisting low and moderate income residents, ensuring that rates and terms for applicants are consistent with similarly situated borrowers, employing safe and sound business practices, ensuring that there is not an undue concentration or systematic pattern of lending resulting in foreclosures, and working with delinquent residential customers to resolve delinquency. The inability of mortgage lenders to receive positive ratings under this monitoring system may result in denial of a license renewal by the DOB.
• Provides the Division of Banks with $3,000,000 to regulate the mortgage lending industry and maintain a foreclosure database. The Division of Banks also will award an additional $2,000,000 in grants to create: 1) a pilot program for best lending practices; 2) a fund first-time homebuyer counseling for sub-prime loans; and 3) funding for 10 foreclosure prevention centers. The funds will be raised from newly established mortgage lender licensing fees.   MACDC will work closely with the administration as it implements this piece of the legislation.
• Requires that mortgage loan originators, including non-profit lenders, are licensed. In order to be licensed by the DOB, the originator must pass a background check, take a residential mortgage lending course, and meet 8 hours of continuing education requirements every 3 years. The bill does exclude Community Development Corporations that make mortgage loans from the mortgage lender licensing fee.
• Failure to comply with the DOB’s monitoring and oversight regulation is a felony punishable by up to 5 years in prison and a $2,000 fine.
• Includes mandatory third party, in-person counseling by a non-profit organization for first-time borrowers of subprime loans at adjustable/variable rates. DOB must promulgate regulations or guidelines to effectuate this provision. The non-profit counseling agencies must be approved by HUD, a housing finance agency of the state, the Massachusetts Homeownership Collaborative, or the regulatory agency which has jurisdiction over the mortgagee.
• Establishes a 90 day right to cure a default, during which the loan may not accelerate and fees (with the exception of late fees not to exceed 3 per cent of the amount of principal and interest overdue) cannot be added to the balance. The right to cure is limited to once during any five-year period.
• Requires the Division of Banks to maintain a foreclosure database and produce an annual report to track developments and trends in mortgage foreclosures.
• Requires the lender to give notice of a default before being able to accelerate the loan and foreclose on the property. The notice must include information on the right to cure, the address and toll free number to whom payment should be made, and contact information for a representative of the current mortgage holder to work with to resolve the dispute.
• Includes modest tenant protections by providing that foreclosures do not affect the tenancy agreement of a tenant whose rental payment is subsidized by the state or federal government. In addition, a tenant that occupies a unit under “an unexpired term for years or a lease for a definite term in effect at the time of the foreclosure sale” shall be deemed a tenant-at-will and therefore have some protections against evictions.
• Increases the amount a holder of a mortgage may charge for a fee to revise a loan to one percent of the outstanding balance of the existing note and mortgage.MACDC thanks the Legislature, the Governor, and the members of the Coalition for a productive partnership in passing this legislation. The passage of H. 4387 is a great conclusion to 2007 formal sessions.  MACDC along with the Coalition will monitor the implementation of this new law to ensure it is making a difference for families and communities facing foreclosure.

Governor releases Housing Bond Bill

Thanks to Sean Carron of CHAPA for the synopses of the foreclosure prevention bill and the Governor's Bond bill.

MACDC continues to fight for Small Business program

MACDC has asked members of both the House and Senate to request $750,000 be included in the supplemental budget.  Please contact either Allison Staton or Chris Harris for more information about advocacy efforts on behalf of the program.

Expiring Use Bill Still in Committee

One of MACDC's priorities for this year was to gain passage of a statewide bill that would protect expiring use properties in the state.  Unfortunately, it appears that no bill will pass this calendar year but MACDC will continue to fight for it during 2008.  For more information about the bill, or the Coalition supporting the legislation, please contact Pam Bender.

Doughnuts with Delegates

This is a terrific way to promote both the LIFT campaign and local issues impacting your work.

Legislative Learning Sessions

MACDC is holding regional legislative learning sessions over dinner so that CDC leaders can learn:

• how state legislation and state policies affect you and your community and
• concrete ways you can have an affect on state legislation and policies.