Code of Massachusetts Regulations › 209 CMR - DIVISION OF BANKS AND LOAN AGENCIES › Title 209 CMR 56.00 - Foreclosure prevention options › Section 56.02 - Definitions

Current through Register 1525, July 5, 2024
For purposes of
				209
				CMR 56.00, the following definitions apply:
Affordable Monthly Payment
means the
				monthly payments on a mortgage loan, which, taking into account the borrower's
				current circumstances, including verifiable gross monthly income, debts, assets
				and obligations enable a borrower to make the payments in accordance with the
				affordability guidelines and standards set forth under at least one of the
				defined modified mortgage loan programs.
Borrower
means a mortgagor of a
				mortgage loan.
Certain Mortgage Loan
means a loan to
				a natural person made primarily for personal, family or household purposes
				secured wholly or partially by a mortgage on an owner-occupied residential
				property with one or more of the following loan features:
(a) An introductory interest rate granted for a period of three
				years or less and such introductory rate is at least 2% lower than the fully
				indexed rate;
(b) Interest-only payments for any period of time, except in
				the case where the mortgage loan is an open-end home equity line of credit or
				is a construction loan;
(c) A payment option feature, where any one of the payment
				options is less than principal and interest fully amortized over the life of
				the loan;
(d) The loan did not require full documentation of income or
				assets;
(e) Prepayment penalties that exceed M.G.L. c. 183, § 56
				or applicable federal law;
(f) The loan was underwritten with a loan-to-value ratio at or
				above 90% and the ratio of the borrower's debt, including all housing-related
				and recurring monthly debt, to the borrower's income exceeded 38%; or
(g) The loan was underwritten as a component of a loan
				transaction, in which the combined loan-to-value ratio exceeded 95%;
provided, however, that a loan shall be a certain mortgage
				loan if, after the performance of reasonable due diligence, a creditor is
				unable to determine whether the loan has one or more of the loan features in
				209 CMR 56.02:
Certain Mortgage Loan
(a) through (g);
				and provided, further, that loans financed by the Massachusetts Housing Finance
				Agency, established in St. 1966, c. 708 and loans originated through programs
				administered by the Massachusetts Housing Partnership Fund board established in
				St. 1985, c. 405, § 35 shall not be certain mortgage loans.
Creditor
means 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.
Creditor
shall also include any servant, employee or
				agent of a creditor.
Creditor's Representative
means a
				person who has the authority to negotiate and approve the terms of and modify a
				mortgage loan, or a person who, under a servicing agreement, has the authority
				to negotiate and approve the terms of and modify a mortgage loan.
Full Documentation
means a mortgage
				program requiring verifiable documentation of borrower's income, assets and
				financial obligations to perform an analysis of borrower eligibility for a
				mortgage loan. Notwithstanding the documentation standards provided under a
				full documentation loan, a 'streamlined refinance loan' of a mortgage loan
				insured by the Federal Housing Administration, or originated in accordance with
				guidelines published by the Federal Home Loan Mortgage Corporation or the
				Federal National Mortgage Association, shall meet the definition of full
				documentation.
Fully Indexed Rate
means the interest
				rate on an adjustable-rate mortgage calculated as the index rate prevailing at
				origination plus the margin to be added to it after the expiration of an
				introductory interest rate.
Modified Mortgage Loan
means a
				mortgage loan modified from its original terms including, but not limited to, a
				loan modified pursuant to one of the following:
(a) The Home Affordable Modification Program;
(b) The Federal Deposit Insurance Corporation's Loan
				Modification Program;
(c) Any modification program that a lender uses which 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;
(d) The Federal Housing Administration; or
(e) A similar federal loan modification plan.
Mortgagee
means a person or entity to
				whom property is mortgaged, the mortgage creditor or lender including, but not
				limited to, mortgage servicers, lenders in a mortgage agreement and any agent,
				servant or employee of the mortgagee or any successor in interest or assignee
				of the mortgagee's rights, interests or obligations under the mortgage
				agreement.
Mortgage Loan
means a loan to a
				natural person made primarily for personal, family or household purposes
				secured wholly or partially by a mortgage on residential property.
Mortgage Servicer
means a person or
				entity which administers or at any point administered the mortgage; provided,
				however, that such administration shall include, but not be limited to,
				calculating principal and interest, collecting payments from the borrower,
				acting as escrow agent or foreclosing in the event of a default.
Net Present Value
means the present
				net value of a residential property based on a calculation using one of the
				following:
(a) The federal Home Affordable Modification Program base net
				present value model;
(b) The Federal Deposit Insurance Corporation's Loan
				Modification Program;
(c) The Massachusetts Housing Finance Agency's loan program
				used solely by the agency to compare the expected economic outcome of a loan
				with or without a modified mortgage loan; or
(d) Any model approved by the Division of Banks to consider the
				total present value of a series of future cash flows relative to a mortgage
				loan.
Residential Property
means real
				property located in the Commonwealth having thereon a dwelling house with
				accommodations for four or less separate households and occupied, or to be
				occupied, in whole or in part by the borrower; 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 residence other than a primary residence; and provided further,
				that residential property shall not include residential property taken in whole
				or in part as collateral for a commercial loan; and provided further, that for
				the purpose of determining whether a loan is a certain mortgage loan,
				residential property shall not include a property subject to condemnation or
				receivership.