Massachusetts is watching

Given the interesting but not widely known fact that foreclosure rates in the current crisis are lower in neighborhoods with a larger percentage of CRA-regulated institutions, it’s promising to see Massachusetts using a bit of its banking regulatory powers in an attempt to mitigate the crisis.

In short, Mass. is adding an evaluation criterion to its state licensing procedure — how many loans have you been willing to modify or restructure to save them from foreclosure?

It’s imperfect, as many of those loans have been sold (still, perhaps this will inspire think some of these servicers to collectively do more to lean on investors), and it doesn’t apply to servicers who aren’t lenders or to federally regulated banks. The state estimates this means it will apply to 30 percent of companies that collect loans in the Bay State. Not nothing at least.

Is there a snowball’s chance in hell of getting something like this going at the federal level? Or at least making it a movement throughout a lot of states?

Miriam Axel-Lute is CEO/editor-in-chief of Shelterforce. She lives in Albany, New York, and is a proud small-city aficionado.


  1. Massachusetts has also passed a new CRA law specifically for Mortgage Companies – the first such CRA law in the country. The Division of Banks is currently seeking comments on its draft regulations. Go to and click on the division of banks page to find them.


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