Code of Massachusetts Regulations
209 CMR - DIVISION OF BANKS AND LOAN AGENCIES
Title 209 CMR 54.00 - Mortgage Lender Community Investment
Section 54.22 - Lending Test

Universal Citation: 209 MA Code of Regs 209.54

Current through Register 1537, December 20, 2024

(1) Scope of Test.

(a) The lending test evaluates a mortgage lender's record of helping to meet the mortgage credit needs of the Commonwealth through its lending activities by considering a mortgage lender's home mortgage and community development lending.

(b) The Commissioner considers originations and purchases of loans as reported by the mortgage lender under HMDA. The Commissioner will also consider any other loan data the mortgage lender may choose to provide.

(2) Performance Criteria. The Commissioner evaluates a mortgage lender's performance pursuant to the following criteria:

(a) Geographic Distribution. The geographic distribution of the mortgage lender's home mortgage loans, based on the loan location, including:
1. the dispersion of lending in the Commonwealth and whether lending arbitrarily excludes low- and moderate-income geographies; and

2. the number and amount of loans in low-, moderate-, middle-, and upper-income geographies in the Commonwealth;

(b) Borrower Characteristics. The distribution of the mortgage lender's home mortgage loans based on borrower characteristics, including the number and amount of home mortgage loans to low-, moderate-, middle-, and upper-income individuals, including loans to assist existing low- and moderate-income residents to be able to acquire or remain in affordable housing in their neighborhoods at rates and terms that are reasonable considering the mortgage lender's history with similarly situated borrowers;

(c) Innovative or Flexible Lending Practices. The mortgage lender's use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- and moderate-income individuals or geographies, including loans and other products to assist delinquent home mortgage borrowers to be able to remain in their homes. The Commissioner shall also consider the availability of mortgage loan products that are suitable for such low- and moderate-income individuals;

(d) Loss Mitigation Efforts. The mortgage lender's efforts to work with delinquent home mortgage loan borrowers to facilitate a resolution of the delinquency, including the number of loan modifications, the timeliness or such modifications, and the extent to which such modifications are effective in preventing subsequent defaults or foreclosures;

(e) Fair Lending. The mortgage lender's performance relative to fair lending policies and practices pursuant to written policies and directives issued by the Commissioner; and

(f) Loss of Affordable Housing. The mortgage lender's number and amount of loans that show an undue concentration and a systematic pattern of lending resulting in the loss of affordable housing units, including a pattern of early payment defaults.

(3) Third-party Lending. No mortgage lender may include a loan origination or loan purchase for consideration if another mortgage lender or depository institution claims the same loan origination or purchase under 209 CMR 54.00 or the state or federal Community Reinvestment Act.

(4) Lending Performance Rating. The Commissioner rates a mortgage lender's performance as provided in 209 CMR 54.61.

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