2023 Massachusetts General Laws › Part II - Real and Personal Property and Domestic Relations › Title I - Title to Real Property › Chapter 183 - Alienation of Land › Section 60 - Notes Secured by Liens, Amortization of Principal by Maturity; Conditions; Variable Rate of Amortization; Exemptions

Section 60. Whenever any note made to finance or refinance the purchase of and secured by a first lien on a dwelling house in the commonwealth of four or fewer separate households occupied or to be occupied in whole or in part by the mortgagor provides for installment payments of principal or interest or both that will not amortize the outstanding principal amount in full by the maturity of such note and the term of the mortgage securing the note is for a period longer than such note, such note and its disposition at maturity shall be subject to automatic renewal or extension of the note at the option of the mortgagor and such conditions and restrictions imposed by the commissioner. Such conditions and restrictions shall include, but not be limited to, the following: the minimum term of the note; the method by which the rate of interest on a renewed or extended note may be assigned; the maximum increase in the rate of interest at renewal or extension of note; provisions for decreases in the rate of interest at renewal or extension of the note as may be warranted by market conditions; requirements for advance notification and explanation of adjustment of the rate of interest in connection with renewing or extending the note, provided that such notification and explanation shall occur no less than thirty days prior to the rate adjustment.
Notwithstanding any provision of law to the contrary, the commissioner may, by further conditions and restrictions, provide that the rate of amortization may be varied, including utilizing a period of negative amortization, in order to adjust the rate of interest.
The provisions of this section shall apply to a note evidencing a loan given for personal, family or household purposes.
The provisions of this section shall not apply to such transaction entered into by a person, partnership, association, trust or corporation making five or less mortgage loans in a calendar year; provided, however, that in computing the number of mortgage loans there shall be counted in the loans of more than one partnership, association, trust or corporation, the majority interest of which are owned or controlled directly or indirectly by the same person or persons, partnerships, associations, trusts or corporations and including in the loans of a partnership, trust or company not incorporated the loans of the several members thereof; provided, further, that a note exempted by the provisions of this paragraph shall contain the following statement appearing conspicuously therein: THIS NOTE IS A CONTRACT FOR A SHORT–TERM LOAN. THIS LOAN IS PAYABLE IN FULL AT MATURITY. YOU MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST WHEN DUE. THE LENDER IS UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. YOU WILL, THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY OWN, OR WILL HAVE TO FIND A LENDER WILLING TO LEND YOU THE MONEY AT PREVAILING MARKET RATES, WHICH MAY BE CONSIDERABLY HIGHER THAN THE INTEREST RATE ON THIS LOAN. The provisions of this paragraph shall not be construed as imposing any requirements for finance charge disclosure as may otherwise be required by chapter one hundred and forty D.