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The Mortgage Action Alliance is MBA’s free, voluntary, and nonpartisan grassroots advocacy network of real estate finance professionals.
Tell MA Legislators: Oppose Problematic Forbearance and Eviction Legislation

MAA members in Massachusetts,
 
Please take action today to oppose drafted legislation that would have severe, adverse impacts on lenders by extending recovery options to borrowers and placing the burden on the industry.  HD.5166 and S.2831, An Act to Guarantee Housing Stability During The COVID-19 Emergency and Recovery, seeks to extend current eviction and foreclosure moratoriums as well as mandatory forbearances for 12 months after the state of emergency. Both HD.5166 and S.2831 are in the Joint Committee on Housing and need to be amended to:

  • Deem those loans that are subject to and in compliance with federal CARES Act provisions, as well as loans that are being offered forbearance consistent with these federal mandates, are sufficient to meet the provisions of this legislation;
  • separate rent from mortgage related issues;
  • require documentation of the hardship so at least borrowers that truly need this and not open this to anyone who may be able to pay their mortgage without difficulty;   
  • exclude mandating lenders paying escrows, because if a borrower can't pay the lender will make these payments anyway;
  • allow the continued accrual of interest on the amount of forbearance;
  • alter the provision that says, “move everything to the end of the loan" into something more flexible for borrowers and lenders; and
  • ensure the Housing Court must does not exceed their jurisdiction to be able to make exceptions to mortgage contracts.
To date there have been numerous actions by the U.S. Congress, FHFA, Fannie Mae, Freddie Mac, CFPB, the Massachusetts legislature, Governor Baker, the Massachusetts Attorney General, and the Massachusetts Division of Banks to protect consumers impacted by COVID-19 from additional financial hardships. Since the onset of the pandemic, and the enactment of the CARES Act, consumers have been provided with numerous protections and robust and routinely improved options to help them address income interruption. The real estate finance industry has responded to this need nationally by providing forbearance on 4.3 million loans in just a few short months. While many of these loans are federally related, the share of loans in forbearance among private label securities or portfolio loans is nearly 11 percent compared to 8.2 percent of all loans, according to the Mortgage Bankers Association. These results have been achieved, in part, by state-chartered institutions throughout the country working with consumers to develop and improve solutions for their pandemic-impacted customers. The proposed bills would ignore these results and instead diverge from and conflict with the federal law and the difficult work done to operationalize similar opportunities outside these requirements.
 
We are asking that you contact your legislators to oppose this bill because of the following problematic provisions:
  • Secondary Market Access: For loans sold on the secondary market, Fannie Mae and Freddie Mac have specific directives that must be followed to provide a uniform functional marketplace for investors in mortgage loans.  Government insurers and guarantors (FHA, VA, and USDA) backed by Ginnie Mae have done the same. Adding additional regulations puts at risk the ability to access the secondary market and could cause irreparable harm to Massachusetts home buyers.
  • Documentation and capacity: Many consumers were not adversely impacted from COVID-19 yet this legislation allows anyone to qualify for the moratoriums without proof of financial hardship.
  • Length of Moratoriums: The timing on this bill extends evictions, moratoriums, and forbearances until 12 months after the state of emergency ends. In Massachusetts, the moratorium for evictions and foreclosures was extended to October 17th.
  • Foreclosures and escrows: This bill would prohibit lenders from enforcing their liens through the foreclosure process for an unspecified and unacceptable time frame. This prohibition includes loans that were significantly delinquent prior to the COVID-19 pandemic. This bill also requires lenders to also advance escrows for taxes and insurance payments to the end of the mortgage term is creating an unnecessary burden on mortgage lenders, especially without the requirement of documentation establishing the financial need.
  • 93A Violations: A lender should not worry if a mistake or a misunderstanding result in a 93A violation. 
  • Housing Court: The Housing Court should not be empowered to interpret or rule on terms contained in a recorded mortgage document.

Please contact your legislators today and urge them to oppose this problematic legislation!

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