Massachusetts Origination Reference Guide
- Kacey Olson
Owned by Kacey Olson
| Citation | Topic | Requirement |
| Title to Real Property / Mass. Gen. Laws Ann. ch. 184, §17B | Addendum to Loan Application / Attorney Disclosure | Every application for a mortgage loan on owner-occupied 1- to 4-family residential property must be made on a printed form containing the following 2 statements in type of at least 2 points larger than the other type used on the application: (1) the responsibility of the attorney for the lender is to protect the interest of the lender; and (2) borrowers may, at their own expense, engage an attorney of their selection to represent their interests in the transaction. A printed copy of the above statements must be given to the borrower at the time of making the application. |
Adverse Action Notice - Timing | (a) Whenever credit or insurance for personal, family or household purposes, or employment involving a consumer is denied or terminated or the charge for such credit or insurance is increased either wholly or partly or whenever a consumer's line of credit is reduced, except when the consumer is delinquent with regard to such line of credit, because of information contained in a consumer report from a consumer reporting agency, the user of the consumer report shall, within ten business days of its decision to deny or terminate such credit, insurance or employment, or to increase the charge for such credit or insurance, or to reduce a consumer's line of credit, except when the consumer is delinquent with regard to such line of credit, notify such consumer in writing against whom such adverse action has been taken. | |
Adverse Action Notice - Content | In addition to requirements under the ECOA, Massachusetts requires specific language regarding the rights of the consumer be included in the notice. | |
| Prohibited Acts and Practices / Mass. Regs. Code tit. 209, §42.12A(6) | Blank Spaces | A mortgage lender or broker may not have a borrower sign a blank or incomplete mortgage loan application or mortgage loan documents. |
| Determination and Documentation of Borrower's Interest / Mass. Regs. Code tit. 209, §53.07(1) | Borrower Interest Worksheet | A lender may not knowingly make a home loan if the home loan pays off all or part of an existing home loan that was consummated within the prior 60 months or other debt of the borrower, unless the refinancing is in the borrower's interest. This worksheet must be completed at or prior to closing. |
| Mortgages and Loans / Mass. Gen. Laws Ann. ch. 167E, §7A(b) | Certification of Borrower Counseling | No lender may make a reverse mortgage loan to a mortgagor unless the mortgagor affirmatively opts in writing for the reverse mortgage, and at, or before, the closing of any reverse mortgage loan the mortgagee: (1) has received written certification from a counselor with a third-party organization that the mortgagor has received counseling in person, and: (2) has completed an approved counseling program offered by the third-party organization provided the third-party organization has been approved by the executive office of elder affairs. |
| Mass. Gen. Law, Ch. 183A, §4(5) | Condominium Notice | Each mortgagee holding a recorded mortgage upon a unit must provide written notice of the mortgagee's name and mailing address to the organization of unit owners as well as any changes in the name and address thereafter. |
Document Preparation and Loan Closings | “Because deeds pertaining to real property directly affect significant legal rights and obligations, the drafting for others of deeds to real property constitutes the practice of law.” “[M]any of the activities that necessarily are included in conducting a closing constitute the practice of law and the person performing them must be an attorney… [T]he closing attorney must play a meaningful role in connection with the conveyancing transaction that the closing is intended to finalize.” | |
| Disclosure of Consumer Credit Costs and Terms / Mass. Regs. Code tit. 209, §32.32(3) | High Cost Home Loan Disclosure | Must be provided to applicants for a high cost home loan with application. Compliance with 12 CFR 1026.32(c) constitutes compliance with 209 CMR 32.32(3). |
| Reverse Mortgage Loans / Mass. Regs. Code tit. 209, §55.03 | Important Information for Elder Homeowners (aka Opt in Form) | No mortgagee shall make a reverse mortgage loan to a mortgagor unless the mortgagor affirmatively opts in writing for the reverse mortgage. The mortgagee shall provide the Opt in Form to the mortgagor after the mortgagor has completed the required reverse mortgage counseling through a Counselor and a written certification of completion has been provided to the mortgagee. A mortgagor must sign the Opt in Form and return it to the mortgagee prior to the mortgagee's issuance of a written commitment to make the reverse mortgage loan. |
| The Licensing of Mortgage Lenders and Mortgage Brokers / 209 CMR §42.12A | Interest Rate Locking | It is a prohibited act or practice for a mortgage broker to issue a mortgage loan rate lock commitment on its own behalf or on behalf of a mortgage lender, or to imply to a consumer that it can lock a rate on behalf of the consumer. However, a mortgage broker may take a rate lock commitment fee for transmittal to a mortgage lender prior to issuance by mortgage lender of a commitment or approval, provided that prior to the taking of a rate lock commitment fee: (1) the broker provides consumer with a rate lock commitment from the lender which intends to make the loan; and (2) the rate lock commitment fee is made payable by the consumer to the lender which intends to make the loan. A mortgage broker may only take a rate lock commitment fee for transmittal to the mortgage lender which intends to make the loan. |
| Mass. Gen. Laws Ann. ch. 183, §59 | Late Fees | In no event, in assessing a penalty because of the delinquency in making all or any part of a periodic payment under a mortgage note, may the penalty or late charge exceed 3% of the amount of principal and interest overdue. In calculating the penalty or late charge, any amount of the periodic payment representing estimated tax payments required by the terms of the mortgage note or deed may not be included. |
| Mortgages and Loans / Mass. Gen. Laws Ann. ch. 167E, §7(d) | Loan Type Disclosure | Prior to making a reverse mortgage loan, a lender must provide a prospective borrower with written materials explaining in plain language, the type of mortgage being offered and its specific terms. |
| The Licensing of Mortgage Lenders and Mortgage Brokers / 209 CMR §42.02 | Mortgage Loan Rate Lock Commitment | Prior to taking of a rate lock commitment fee or otherwise offering or entering a mortgage loan rate lock commitment with a consumer, a mortgage lender must provide the consumer, directly or indirectly, with a mortgage loan rate lock commitment dated by the mortgage lender. |
| Supervision of Banks / Mass. Gen. Laws Ann. ch. 167, §14A | Mortgage Review Board Notice | If a loan application is denied, and the denial meets the definition of a “residential mortgage denial, ” a lender must provide the applicant with notice of his or her right to appeal the denial of the loan application to the Massachusetts Mortgage Review Board. A residential mortgage denial is defined as “...a denial of an extension of credit to finance or refinance the purchase of a first lien on residential property located in the Commonwealth of four units or less and occupied in whole or in part by the mortgagor.” |
| Mortgage Loan Originator Law / Mass. Gen. Laws Ann. ch. 255F, §18 | NMLS Unique Identifier - Originator | The NMLS unique identifier of any person originating a residential mortgage loan must be clearly shown on all residential mortgage loan application forms, solicitations or advertisements, including business cards or websites, and any other documents as established by rule, regulation or order of the Commissioner. |
NMLS Unique Identifier - Broker | A licensed mortgage lender, mortgage broker, or mortgage loan originator must disclose the type and number of its license(s) to an applicant, in writing, at the time a fee is paid or an application is accepted. | |
| Mortgage Lenders and Mortgage Brokers / Mass. Regs. Code tit. 940, §8.06(16) | No Documentation, Stated Documentation, or Limited Documentation Loan Disclosure | It is an unfair or deceptive act or practice for a mortgage lender or broker to process or make a mortgage loan without documentation to verify the borrower's income (a so-called “no documentation, ” “no doc, ” “stated income” or “limited documentation” loan) unless the lender or broker, as applicable, first provides a written document to the borrower, which must be signed by the borrower in advance of the closing. |
| Title to Real Property / Mass. Gen. Laws Ann. ch. 183, §69 | Notice of Flood Insurance Coverage | Section 69 requires that creditors, creditors’ representatives, and insurance producers provide borrowers with a notice about flood insurance coverage before it is purchased. |
| Homesteads / Mass. Gen. Laws Ann. ch. 188, §11 | Notice of the Right to Declare Homestead Protection | In all mortgage transactions, the closing attorney or settlement agent must provide the mortgagor with notice of the right to declare homestead protection, receipt of which must be acknowledged in writing by the mortgagor. The notice must include, but not be limited to, a summary of the differences between the automatic homestead protection and the enhanced benefits acquired by making a declaration of homestead. |
| Disclosure of Consumer Credit Costs and Terms / Mass. Regs. Code tit. 209, §32.34(2) | Optional Insurance Disclosure | It is an unfair act or practice for a lender to engage in packing high cost home loans. However, it will not constitute the practice of “packing” if the lender, at least 3 business days before the loan is closed, makes a separate oral and a separate clear and conspicuous written disclosure in at least 12-point type to the borrower. Must be provided at least 3 business days prior to the close of a high cost home loan if: (1) a lender solicits credit life, accident and health, disability or unemployment insurance; (2) a lender receives direct or indirect compensation for the sale of such insurance; and (3) the charges for such insurance are prepaid with the proceeds of the loan and financed as part of the principal amount of the loan. |
| Public Safety and Good Order / Mass. Gen. Laws Ann. ch. 148, §26E | Smoke Detector Certification | All one and two family dwellings occupied in whole or in part for residential purposes and not regulated by section 26A or 26B shall be equipped with approved smoke detectors. Buildings or structures occupied in whole or in part for residential purposes and containing not less than three nor more than five units and not regulated by section 26A, 26B or 26C shall be equipped with approved smoke detectors. |
| Department of Environmental Protection / Mass. Regs. Code tit. 310, §15.301 | Title V Certificate (Septic System Inspection) | Massachusetts requires the inspection of a septic system whenever a property is transferred to a different owner or the use of the property changes. A copy of the inspection report must be submitted to the buyer or other person acquiring title to the facility served by the system. The Massachusetts Department of Environmental Protection (“DEP”) may require that systems not in compliance with Massachusetts environmental standards be repaired or replaced. Consideration should be given with respect to the impact of this requirement on the timing of purchase money loans and on foreclosure. |