The Massachusetts Division of Banks has released new regulations entitled “Right to Cure a Mortgage Default.” The new “Right to Cure Regulations” are found at 209 CMR 56:00, and they include a form to be utilized by mortgage holders and loan servicers for providing the 150-day right to cure notice (or 90-day right to cure notice if applicable) which must be sent to borrowers prior to the commencement of foreclosure for certain consumer mortgages encumbering principal residence properties. The Right to Cure Regulations are effective February 3, 2012, and the new form of Right to Cure Notice may be used voluntarily starting on February 3, 2012. Use of the new form of Right to Cure Notice is not mandatory until April 23, 2012.
The Right to Cure Regulations are designed to assist commencement of foreclosure provisions found in Chapter 244, Section 35A of the Massachusetts General Laws, which requires the sending of a right to cure notice prior to the commencement of foreclosure proceedings for certain principal residence properties. Section 35A provides for a 150-day right to cure, or in the alternative, a 90-day Right To Cure Notice may be sent provided the mortgagee can demonstrate that it has negotiated in good faith with the borrower; the mortgagee certifies that it has negotiated to reach an alternative to foreclosure in good faith with the borrower; at least one meeting has taken place between the mortgagee and the borrower; the mortgagee provided loss mitigation information to the borrower before the meeting; and that after the meeting, the creditor is able to demonstrate that the mortgagee and the borrower were not able to reach a resolution (other than foreclosure). A 90-day right to cure notice would also be acceptable if the mortgagee can demonstrate that the borrower failed to respond within 30 days to the mortgagee’s offer to negotiate.
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