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Financial Services Law Insights and Observations

Massachusetts DOB issues expectations for relief to mortgage borrowers

State Issues State Regulation Massachusetts Financial Institutions Mortgage Lenders Mortgage Servicing Mortgages Consumer Lending | Consumer Finance Examination Covid-19

State Issues

On March 25, the Massachusetts Division of Banks (DOB) issued a memorandum to financial institutions, mortgage lenders, and mortgage loan servicers outlining the actions the DOB “fully expects” institutions will take to alleviate the impact of Covid-19 on mortgage borrowers. The actions include (i) postponing foreclosures for 60 days; (ii) forbearing payments for 60 or more days; (iii) waiving fees for late payment and online payment for at least 60 days; (iv) refraining from reporting late payments to credit rating agencies for 60 days; (v) offering an additional 60-day grace period for borrower to complete trial loan modifications; (vi) ensuring borrowers do not experience a disruption of service if a mortgage servicer closes its office; and (vii) proactively reaching out to borrowers to explain the assistance being offered. The memorandum also emphasizes that reasonable and prudent efforts to assist borrowers are consistent with safe and sound banking practices and will not be subject to examiner criticism.

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