HOUSE DOCKET, NO. 2513        FILED ON: 1/16/2025

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1807

The Commonwealth of Massachusetts

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PRESENTED BY:

Kristin E. Kassner

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to foreclosure mediation.

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PETITION OF:

HOUSE DOCKET, NO. 2513        FILED ON: 1/16/2025

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1807

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Fourth General Court
(2025-2026)

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An Act relative to foreclosure mediation.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

Chapter 244 of the General Laws is hereby amended by adding the following section:-

Section 42. (a) As used in this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:

“Borrower”, a mortgagor of a mortgage loan.

“Creditor”, a person or entity that holds or controls, partially, wholly, indirectly, directly or in a nominee capacity, a mortgage loan securing an owner-occupied residential property including, but not limited to, an originator, holder, investor, assignee, successor, trust, trustee, nominee holder, mortgage electronic registration system or mortgage servicer, including the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; provided, however, that “creditor” shall also include any servant, employee or agent of a creditor.

“Creditor’s representative”, a person who has the authority to negotiate and approve the terms of and modify a mortgage loan, under a servicing agreement.

“Modified mortgage loan”, a mortgage modified from its original terms including, but not limited to, a loan modified under: (i) the Home Affordable Modification Program; (ii) the Federal Deposit Insurance Corporation’s Loan Modification Program; (iii) any modification program that a lender uses that is based on accepted principles and the safety and soundness of the institution and authorized by the National Credit Union Administration, the division of banks or any other instrumentality of the commonwealth; (iv) the Federal Housing Administration; or (v) a similar federal loan modification plan.

“Mortgage loan”, a loan to a natural person made primarily for personal, family or household purposes secured wholly or in part by a mortgage on residential property.

“Residential property”, real property located in the commonwealth on which there is a dwelling with accommodations for not more than 4 separate households and occupied, or to be occupied, in whole or in part by the obligor on the mortgage debt; provided, however, that “residential property” shall be limited to the principal residence of a person; provided further, that “residential property” shall not include an investment property or a residence, other than a primary residence, or residential property taken in whole or in part as collateral for a commercial loan.

(b) There shall be a foreclosure mediation program administered by the Massachusetts Office of Public Collaboration at the University of Massachusetts at Boston to be offered to borrowers and creditors, by agreement.

(c) A creditor shall, concurrently with the notice sent to the borrower of residential property under section 35A, give notice to the borrower of the borrower’s right to participate in the foreclosure mediation program by attaching to the right to cure default notice: (i) notice of the availability of foreclosure mediation, in such form as the Massachusetts Office of Public Collaboration prescribes; and (ii) a foreclosure mediation request form, in such form as the Massachusetts Office of Public Collaboration prescribes. A borrower electing to participate in foreclosure mediation shall submit the foreclosure mediation request form to the creditor not more than 15 days after receipt of the notice.

(d) An in-person mediation session shall be conducted by a neutral third-party mediator between the borrower, the borrower’s representative or housing counselor and the creditor’s representative, who shall have the authority to negotiate an alternative to foreclosure including, but not limited to: (i) a modified mortgage loan; (ii) a reduction in principal; (iii) a reduction in interest rate; or (iv) an increase in the amortization period of the mortgage loan; provided, however, that an alternative form of meeting may be mutually agreed upon by the mortgagor, the mortgagee and the mediator. The creditor may remotely attend the mediation session by phone or video conferencing; provided, that the creditor’s representative or counsel shall attend the mediation session in person.

(e) If a borrower elects to participate in the foreclosure mediation program, a creditor shall not accelerate the note or otherwise initiate foreclosure proceedings unless the mediator has certified that the creditor participated in the foreclosure mediation program in good faith and made all reasonable efforts to find an alternative to foreclosure and any agreement is in full compliance with all state and federal guidelines.

(f) The borrower’s or creditor’s rights or defenses in the foreclosure action shall not be waived by participating in the foreclosure mediation program.

(g) Nothing in this section shall require a creditor to modify a mortgage or change the terms of payment of a mortgage.