Code of Massachusetts Regulations
209 CMR - DIVISION OF BANKS AND LOAN AGENCIES
Title 209 CMR 54.00 - Mortgage Lender Community Investment
Section 54.61 - Ratings
Universal Citation: 209 MA Code of Regs 209.54
Current through Register 1531, September 27, 2024
(1) Ratings in General.
(a) In assigning a
rating, the Commissioner evaluates a mortgage lender's performance under the
applicable performance criteria in
209 CMR 54.00, in accordance
with
209 CMR
54.21, and
54.25, which
provides for adjustments on the basis of evidence of discriminatory or other
illegal credit practices.
(b) A
mortgage lender's performance need not fit each aspect of a particular rating
profile in order to receive that rating, and exceptionally strong performance
with respect to some aspects may compensate for weak performance in others. The
mortgage lender's overall performance, however, must be consistent with safe
and sound lending practices and generally with the appropriate rating profile
as follows.
(2) Mortgage Lenders Evaluated under the Lending and Service Tests.
(a)
Lending
Performance Rating. The Commissioner assigns each mortgage
lender's lending performance one of the five following ratings.
1.
Outstanding. The
Commissioner rates a mortgage lender's performance "outstanding" if, in
general, it demonstrates:
a. An excellent
geographic distribution of loans in the Commonwealth;
b. An excellent distribution of loans among
individuals of different income levels, given the product lines offered by the
mortgage lender;
c. An excellent
record of serving the mortgage credit needs of highly economically
disadvantaged areas in the Commonwealth and low-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, consistent with safe and sound
operations;
d. Extensive use of
innovative or flexible lending practices in a safe and sound manner to address
the mortgage 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;
e. Mortgage products demonstrate an excellent
suitability for low- and moderate-income individuals;
f. It plays a leadership role in working with
delinquent mortgage loan borrowers to facilitate a successful resolution of the
delinquency, including a substantial number of loan modifications in a timely
manner and which are effective in preventing subsequent defaults or
foreclosures;
g. There is no
evidence of loans that show an undue concentration and a systematic pattern of
lending, including early payment defaults, resulting in the loss of affordable
housing units; and
h. An excellent
record relative to fair lending policies and practices.
2.
High
Satisfactory. The Commissioner rates a mortgage lender's
performance "high satisfactory" if, in general, it demonstrates:
a. A good geographic distribution of loans in
the Commonwealth;
b. A good
distribution of loans among individuals of different income levels given the
product lines offered by the mortgage lender;
c. A good record of serving the mortgage
credit needs of highly economically disadvantaged areas in the Commonwealth and
low-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 consistent with
safe and sound operations;
d. Use
of innovative or flexible lending practices in a safe and sound manner to
address the mortgage 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;
e. Mortgage products demonstrate a good
suitability for low- and moderate-income individuals;
f. Its efforts are substantial in working
with delinquent mortgage loan borrowers to facilitate a successful resolution
of the delinquency, including frequent and swift loan modifications which are
effective in preventing subsequent defaults or foreclosures;
g. There is no evidence of loans that show an
undue concentration and a systematic pattern of lending, including early
payment defaults, resulting in the loss of affordable housing units;
and
h. A good record relative to
fair lending policies and practices.
3.
Satisfactory. The
Commissioner rates a mortgage lender's performance "satisfactory" if, in
general, it demonstrates:
a. An adequate
geographic distribution of loans in the Commonwealth;
b. An adequate distribution of loans among
individuals of different income levels, given the product lines offered by the
mortgage lender;
c. An adequate
record of serving the mortgage credit needs of highly economically
disadvantaged areas in the Commonwealth and low-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 consistent with safe and sound
operations;
d. Limited use of
innovative or flexible lending practices in a safe and sound manner to address
the mortgage 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;
e. Mortgage products demonstrate an adequate
suitability for low- and moderate-income individuals;
f. Its efforts are adequate in working with
delinquent mortgage loan borrowers to facilitate a successful resolution of the
delinquency, including an adequate number of loan modifications completed in a
prompt manner and which are effective in preventing subsequent defaults or
foreclosures;
g. There is no
evidence of loans that show an undue concentration and a systematic pattern of
lending, including early payment defaults, resulting in the loss of affordable
housing units; and
h. An adequate
record relative to fair lending policies and practices.
4.
Needs to Improve.
The Commissioner rates a mortgage lender's performance "needs to improve" if,
in general, it demonstrates:
a. A poor
geographic distribution of loans, particularly to low- and moderate-income
geographies, in the Commonwealth;
b. A poor distribution of loans among
individuals of different income levels, given the product lines offered by the
mortgage lender;
c. A poor record
of serving the mortgage credit needs of highly economically disadvantaged areas
in the Commonwealth and low-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 consistent with safe and sound operations;
d. Little use of innovative or flexible
lending practices in a safe and sound manner to address the mortgage 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;
e. Mortgage
products demonstrate a poor suitability for low- and moderate-income
individuals;
f. Its efforts are
poor in working with delinquent mortgage loan borrowers to facilitate a
successful resolution of the delinquency, including slow responses to requests
for modification with few loan modifications completed or for which
modifications are not effective in preventing subsequent defaults or
foreclosures;
g. There is possible
evidence of loans that show an undue concentration and a systematic pattern of
lending, including early payment defaults, resulting in the loss of affordable
housing units; and
h. A poor record
relative to fair lending policies and practices.
5.
Substantial
Noncompliance. The Commissioner rates a mortgage lender's
performance as being in "substantial noncompliance" if, in general, it
demonstrates:
a. A very poor geographic
distribution of loans, particularly to low- and moderate-income geographies, in
the Commonwealth;
b. A very poor
distribution of loans among individuals of different income levels given the
product lines offered by the mortgage lender;
c. A very poor record of serving the mortgage
credit needs of highly economically disadvantaged areas in the Commonwealth and
low-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 consistent with
safe and sound operations;
d. No
use of innovative or flexible lending practices in a safe and sound manner to
address the mortgage 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;
e. Mortgage products are unsuitable for low-
and moderate-income individuals;
f.
It fails to work with delinquent mortgage loan borrowers to facilitate a
successful resolution of the delinquency, including no response to requests for
loan modifications or modifications which are ineffective in preventing
subsequent defaults or foreclosures;
g. Origination of loans that show an undue
concentration and a systematic pattern of lending, including early payment
defaults, resulting in the loss of affordable housing units; and
h. A very poor record relative to fair
lending policies and practices.
(b)
Service Performance
Rating. The Commissioner assigns each mortgage lender's service
performance one of the five following ratings.
1.
Outstanding. The
Commissioner rates a mortgage lender's service performance "outstanding" if, in
general, the mortgage lender demonstrates:
a.
It is a leader in providing community development services;
b. Its service delivery systems are readily
accessible to geographies and individuals of different income levels in the
Commonwealth;
c. To the extent
changes have been made, its record of opening and closing branches has improved
the accessibility of its delivery systems, particularly in low- and
moderate-income geographies or to low- and moderate-income individuals;
and
d. Its services (including,
where appropriate, business hours) are tailored to the convenience and needs of
the Commonwealth, particularly low- and moderate-income geographies or low- and
moderate-income individuals.
2.
High
Satisfactory. The Commissioner rates a mortgage lender's service
performance "high satisfactory" if, in general, the mortgage lender
demonstrates:
a. It provides a relatively
high level of community development services;
b. Its service delivery systems are
accessible to geographies and individuals of different income levels in the
Commonwealth;
c. To the extent
changes have been made, its record of opening and closing branches has not
adversely affected the accessibility of its delivery systems, particularly in
low- and moderate-income geographies and to low- and moderate-income
individuals; and
d. Its services
(including, where appropriate, business hours) do not vary in a way that
inconveniences geographies or individuals, particularly low- and
moderate-income geographies and low- and moderate-income individuals.
3.
Satisfactory. The Commissioner rates a mortgage
lender's service performance "satisfactory" if, in general, the mortgage lender
demonstrates:
a. It provides an adequate
level of community development services;
b. Its service delivery systems are
reasonably accessible to geographies and individuals of different income levels
in the Commonwealth;
c. To the
extent changes have been made, its record of opening and closing branches has
generally not adversely affected the accessibility of its delivery systems,
particularly in low- and moderate-income geographies and to low- and
moderate-income individuals; and
d.
Its services (including, where appropriate, business hours) do not vary in a
way that inconveniences geographies or individuals, particularly low- and
moderate-income geographies and low- and moderate-income individuals.
4.
Needs to
Improve. The Commissioner rates a mortgage lender's service
performance "needs to improve" if, in general, the mortgage lender
demonstrates:
a. It provides a limited level
of community development services;
b. Its service delivery systems are
unreasonably inaccessible to portions of the Commonwealth, particularly to low-
and moderate-income geographies or to low-and moderate-income
individuals;
c. To the extent
changes have been made, its record of opening and closing branches has
adversely affected the accessibility of its delivery systems, particularly in
low-and moderate-income geographies or to low- and moderate- income
individuals; and
d. Its services
(including, where appropriate, business hours) vary in a way that
inconveniences geographies or individuals, particularly low- and
moderate-income geographies or low- and moderate-income individuals.
5.
Substantial
Noncompliance. The Commissioner rates a mortgage lender's service
performance as being in "substantial noncompliance" if, in general, the
mortgage lender demonstrates:
a. It provides
few, if any, community development services;
b. Its service delivery systems are
unreasonably inaccessible to significant portions of the Commonwealth,
particularly to low- and moderate-income geographies or to low- and
moderate-income individuals;
c. To
the extent changes have been made, its record of opening and closing branches
has significantly adversely affected the accessibility of its delivery systems,
particularly in low- and moderate-income geographies or to low- and
moderate-income individuals; and
d.
Its services (including, where appropriate, business hours) vary in a way that
significantly inconveniences geographies or individuals, particularly low- and
moderate-income geographies or low- and moderate-income individuals.
(c)
Other
Eligible Criteria for a High Satisfactory or an Outstanding
Rating. A mortgage lender that achieves at least a "satisfactory"
rating under both the lending and service tests may warrant consideration for
an overall rating of "high satisfactory" or "outstanding". In assessing whether
a mortgage lender's performance is "high satisfactory" or "outstanding", the
Commissioner will also consider the mortgage lender's performance in making
qualified investments and community development loans to the extent authorized
under law.
Disclaimer: These regulations may not be the most recent version. Massachusetts may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.