Massachusetts 2025-2026 Regular Session

Massachusetts House Bill H1983 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1 of 1
2	2	HOUSE DOCKET, NO. 1450 FILED ON: 1/15/2025
3	3	HOUSE . . . . . . . . . . . . . . . No. 1983
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Amy Mah Sangiolo
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act relative to unlawful practices in the servicing and foreclosure of a subordinate mortgage.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:Amy Mah Sangiolo11th Middlesex1/15/2025Patrick Joseph Kearney4th Plymouth1/28/2025David Henry Argosky LeBoeuf17th Worcester2/10/2025 1 of 5
16	16	HOUSE DOCKET, NO. 1450 FILED ON: 1/15/2025
17	17	HOUSE . . . . . . . . . . . . . . . No. 1983
18	18	By Representative Sangiolo of Newton, a petition (accompanied by bill, House, No. 1983) of
19	19	Amy Mah Sangiolo, Patrick Joseph Kearney and David Henry Argosky LeBoeuf relative to the
20	20	servicing and foreclosure of subordinate mortgages. The Judiciary.
21	21	The Commonwealth of Massachusetts
22	22	_______________
23	23	In the One Hundred and Ninety-Fourth General Court
24	24	(2025-2026)
25	25	_______________
26	26	An Act relative to unlawful practices in the servicing and foreclosure of a subordinate mortgage.
27	27	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
28	28	of the same, as follows:
29	29	1 SECTION 1. Chapter 244 of the General Laws is hereby amended by adding after section
30	30	235C the following section:-
31	31	3 Section 35D: Servicing and foreclosure of a subordinate mortgage
32	32	4 Section 35D. (a) As used in this chapter, unless the context requires otherwise, the
33	33	5following words shall have the following meanings:
34	34	6 “Subordinate mortgage,” a security instrument in residential real property voluntarily
35	35	7granted in connection with an extension of closed or open-ended credit that was, at the time it
36	36	8was recorded, subordinate to another security interest encumbering the same real property even if
37	37	9the primary lien has been satisfied. The term includes security instruments that function in the
38	38	10form of a mortgage. 2 of 5
39	39	11 “Creditor,” a person or entity that holds or controls, partially, wholly, indirectly, directly
40	40	12or in a nominee capacity, a subordinate mortgage loan securing an owner-occupied residential
41	41	13property, including, but not limited to, an originator, holder, investor, assignee, successor, trust,
42	42	14trustee, nominee holder, Mortgage Electronic Registration System or mortgage servicer,
43	43	15including the Federal National Mortgage Association or the Federal Home Loan Mortgage
44	44	16Corporation; provided, that ''creditor'' shall also include any servant, employee or agent of a
45	45	17creditor; and provided, further, that the bodies politic and corporate and public instrumentalities
46	46	18of the commonwealth established in chapter 708 of the acts of 1966 and in section 35 of chapter
47	47	19405 of the acts of 1985 shall not be a creditor.
48	48	20 (b) The following constitute unlawful practices in connection with the servicing and
49	49	21foreclosure of a subordinate mortgage: (i) the failure to provide the borrower with any written
50	50	22communications regarding the loan for a period of twelve or more cumulative months; (ii) the
51	51	23failure to provide periodic statements for each billing cycle when required by federal or state
52	52	24law; (iii) the failure to provide a transfer of loan servicing notice to the borrower when required
53	53	25to do so by the Real Estate Settlement Procedures Act, 12 USC §2605 and12 CFR §1024.33; (iv)
54	54	26the failure to provide an early intervention notice or other pre-foreclosure notice as required by
55	55	27the Real Estate Settlement Procedures Act or state law including sections 34A and 35B of this
56	56	28chapter; (v) the failure to provide a transfer of loan ownership notice to the borrower when
57	57	29required to do so by federal or state law; (vi) the demand for payment of all or a portion of a
58	58	30subordinate mortgage loan when the statute of limitations for enforcement of the claim has
59	59	31expired; and (vii) any other circumstances that a court determines indicate an intent to abandon
60	60	32the debt. 3 of 5
61	61	33 (c) Contemporaneously with service of the notice of right to cure pursuant to M.G.L. c.
62	62	34244, § 35A the creditor shall also serve the borrower with a notice signed under the pains and
63	63	35penalties of perjury that includes the following: (i) a list of the conduct that constitutes unlawful
64	64	36practices in connection with the servicing and foreclosure of a subordinate mortgage as
65	65	37enumerated in section (b), above; (ii) a verification that the creditor has reviewed the loan
66	66	38account history and determined that neither the creditor nor its predecessors committed any of
67	67	39the practices enumerated in section (b), or if the creditor or its predecessors engaged in such
68	68	40practices, a description of those practices and the dates they occurred; (iii) notification to the
69	69	41borrower that if the borrower believes the creditor or its predecessors engaged in any of the
70	70	42practices enumerated in section (b), the borrower may, prior to a foreclosure sale, petition the
71	71	43court for relief. As part of the court’s determination, the court may bar enforcement of any part
72	72	44of or the entirety of the debt through foreclosure.
73	73	45 (c) Upon the petition of the borrower, the court shall stay the exercise of a power of sale
74	74	46or any proceeding for recovery of possession of the property until a final determination on the
75	75	47petition has been made.
76	76	48 (d) If the court determines that the creditor or its predecessors engaged in any of the
77	77	49unlawful practices enumerated in section (b), the court may order the creditor to: (i) waive
78	78	50interest, fees, and charges added to the loan; (ii) cease all foreclosure activity and begin the
79	79	51foreclosure process anew with a Notice of Right to Cure itemizing the amounts owed after
80	80	52waiver of interest, fees, and charges; (iii) cease all collection activity on the loan; (iv) terminate
81	81	53all transfers or sales of the loan; (v) record a release of all liens securing the loan; (vi) request
82	82	54that the tradelines for the loan be deleted from the borrower’s credit reporting file with any credit 4 of 5
83	83	55reporting agency to which the loan owner, its agents, or their predecessors previously reported
84	84	56the debt; (vii)any other order the court deems just and proper.
85	85	57 (e) A creditor, shall not cause publication of notice of a foreclosure sale upon a
86	86	58subordinate mortgage loan unless at least 30 days prior to such notice, it has recorded an
87	87	59affidavit signed under the pains and penalties of perjury in the appropriate local land records
88	88	60certifying that the creditor served the borrower with the notice described in section (3), attaching
89	89	61a copy of the notice together with a verification and certifying that the content of the notice is
90	90	62true and accurate. The creditor shall deliver a copy of each notice to the division of banks.
91	91	63 (f) If a foreclosure sale has already occurred on a subordinate mortgage, the court may set
92	92	64aside the foreclosure sale upon a finding that the creditor engaged in unlawful practices as
93	93	65enumerated in section (b), failed to comply with provisions of this section, or claimed erroneous
94	94	66amounts due in the pre-sale section 35A notice or in a certification of compliance recorded
95	95	67pursuant to this section. The borrower may bring a claim under this provision as a counterclaim
96	96	68in post-foreclosure eviction proceedings brought by the foreclosing entity.
97	97	69 (g) If the court determines that a creditor or its predecessors engaged in any of the
98	98	70unlawful practices enumerated in section (b), including attempting to collect or collecting on an
99	99	71erroneous amount owed on a subordinate mortgage loan from a person or attempting to foreclose
100	100	72or foreclosing on any portion of such a loan, such creditor is liable to such person in an amount
101	101	73equal to the sum of: (i) any actual damage sustained by such person as a result of such conduct;
102	102	74(ii)punitive damages as the court may allow in the case of a willful failure to comply with any
103	103	75requirement imposed under this section; and (iii) in the case of any successful action to enforce 5 of 5
104	104	76the foregoing liability, the costs of the action, together with a reasonable attorney's fee as
105	105	77determined by the court.
106	106	78 (h) A violation of any provision of this section is a per se violation of the Massachusetts
107	107	79chapter 93A and has created a rebuttable presumption that damages have been incurred, and
108	108	80grounds for license revocation.
109	109	81 (i) The Attorney General shall promulgate regulations necessary to carry out this section
110	110	82and be entitled to enforce these regulations, including by recommending to the Division of Banks
111	111	83that any licensure granted to the creditor be revoked and conducting investigations into
112	112	84compliance with these regulations.
113	113	85 (j) All notices required under the section shall be provided in English and Spanish and
114	114	86clear and conspicuous language at the top of the notice stating that the contents are important and
115	115	87should be translated immediately into the top 7 languages of the Commonwealth.