Household HSBC Watch

Joining a growing number of states in the battle against predatory mortgage lending, Massachusetts enacted a strong anti-predatory lending law earlier this week. The new law passed with overwhelming bipartisan support and with the endorsement of both mortgage industry trade groups and consumer and civil rights advocates.

Among the law’s significant provisions:

Triggers strong consumer protections for loans with fees greater than 5%. The law establishes a comprehensive definition of points and fees to remove the incentive to structure loans in a manner to evade the law’s coverage.

Prohibits “flipping” on all home loans, the practice of knowingly refinancing an existing home loan unless the refinancing is in the borrower’s interest.

For high-cost loans, the law requires counseling, bans prepayment penalties, and places a cap on financing points and fees.

Provides balanced liability for purchasers of home loans to protect the availability of mortgage credit while enabling homeowners to protect their homes from predatory lending.