Alert April 01, 2014

Massachusetts Division of Banks Proposes Amendments to “Borrower’s Interest” Regulations

The Massachusetts Division of Banks proposed amendments to current regulations that would create a safe harbor from regulations that impose restrictions on refinancing home loans for qualified mortgage loans. The regulation prohibits lenders from knowingly refinancing a home loan that was consummated within the prior 60 months unless the refinancing is in the borrower’s interest. The proposed amendments provide that a home loan will be in compliance with the regulation if it is a qualified mortgage as defined by the CFPB’s ability-to-repay and qualified mortgage rule.

The Division of Banks also scheduled a public hearing on April 9, 2014 to discuss the proposed amendments.