Massachusetts H 961: An Act to establish a resolution trust fund for receipt of reasonable mortgage payments

Bill Text

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HOUSE DOCKET, NO. 3017 FILED ON: 1/18/2019
HOUSE . . . . . . . . . . . . . . . No. 961

The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Michelle M. DuBois
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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act to establish a resolution trust fund for receipt of reasonable mortgage payments.
_______________
PETITION OF:

NAME: DISTRICT/ADDRESS: DATE ADDED:
Michelle M. DuBois 10th Plymouth 1/18/2019
Denise Provost 27th Middlesex 1/28/2019
Mike Connolly 26th Middlesex 1/28/2019
Michael D. Brady Second Plymouth and Bristol 2/1/2019
Peter Capano 11th Essex 2/1/2019
Nika C. Elugardo 15th Suffolk 1/30/2019
Carlos González 10th Hampden 2/1/2019
Patricia D. Jehlen Second Middlesex 2/1/2019
Mary S. Keefe 15th Worcester 1/31/2019
Kay Khan 11th Middlesex 2/1/2019
Jack Patrick Lewis 7th Middlesex 2/1/2019
Elizabeth A. Malia 11th Suffolk 2/1/2019

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HOUSE DOCKET, NO. 3017 FILED ON: 1/18/2019
HOUSE . . . . . . . . . . . . . . . No. 961
By Ms. DuBois of Brockton, a petition (accompanied by bill, House, No. 961) of Michelle M.
DuBois and others for legislation to establish a trust fund to protect citizens of the
Commonwealth and municipalities impacted by the mortgage foreclosure crisis. Financial
Services.

The Commonwealth of Massachusetts

_______________
In the One Hundred and Ninety-First General Court
(2019-2020)
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An Act to establish a resolution trust fund for receipt of reasonable mortgage payments.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:

1 SECTION 1. The General Court hereby declares and finds that because changes in
2 financial industry practice as to predatory lending have significantly decapitalized the
3 commonwealth, reduced the tax base of Massachusetts communities, detrimentally affected
4 Massachusetts residents as consumers of predatory mortgage loan products, and made the chain
5 of title of many mortgages of real property untraceable, it is in the interest of the commonwealth
6 to establish a publicly owned and administered fund authorized to receive assets and monies,
7 including residential mortgages where the mortgagee and/or note-owner cannot be ascertained,
8 and to discharge related functions to help rebuild our economy and municipal tax base,
9 especially in the neighborhoods most affected by predatory lending and concomitant foreclosure.
10 SECTION 2. For the purposes of this Act, the following terms shall have the following
11 meanings:

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12 “Mortgagee” or “mortgage holder”, a person who has invested funds or other
13 consideration to hold legal title to real property upon which a mortgage is granted, and who is
14 named as such in the mortgage or any assignment thereof.
15 “Mortgagee of Record”, a “mortgagee” or “mortgage holder” so identified in an
16 instrument that thereafter was recorded.
17 “Mortgage Note”, a promissory note, signed by the mortgagor, promising to pay the
18 lender, or any successor who is entitled to enforce the mortgage note, and specifying the
19 requirements for the repayment of the debt including the amount, interest and charges.
20 “Note Owner”, the lender or a transferee of the note, who is entitled to receive payments
21 under and to enforce the note.
22 SECTION 3. Chapter 40H of the General Laws, as appearing in the 2014 Official
23 Edition, is hereby amended by inserting after section 4 the following section:
24 Section 4A. (a) CEDAC shall establish a Resolution Trust Fund, hereinafter “the Fund”,
25 which is hereby authorized to receive transfers of mortgage loans as to which the current
26 mortgagee and/or note-owner cannot be identified; monies including those appropriated from the
27 general fund or paid into the Fund by bequest or otherwise; targeted funding streams through the
28 Massachusetts state government; and monies that a court or an agency in receipt of settlement
29 funds designates for payment into the Fund. The Fund will be established in accordance with the
30 requirements defined in subsection (a) of section 2A.
31 (b) The Fund may accept any mortgage that through legal action, administrative action
32 such as a qualified written request, documents produced in a legally required mediation or

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33 negotiation, or otherwise is evidenced as not being owned by the mortgagee of record in the
34 appropriate registry of deeds or the claimed note-owner has not produced required original
35 source documents.
36 (c) A court or other entity transferring such a mortgage to the Fund shall, if it has
37 jurisdiction to do so, modify these payments to the extent necessary to obtain compliance with
38 traditional prime lending characteristics including, but not limited to, a principal of not more than
39 80 percent of t