Massachusetts General Laws ch. 183 sec. 63A – Revisions in mortgage terms; restrictions; fees
Section 63A. A mortgagee may, at the request of the owner of the equity of redemption, revise the rate of interest, change an adjustable or variable rate to a fixed rate, extend the term of the mortgage or change the amount of the periodic payments of principal or interest, or both, of an existing note and mortgage from said owner which it holds on a one to four family, owner occupied residence located in the commonwealth; provided, however, that (i) no additional money shall be loaned or advanced thereon, except (a) in accordance with section twenty-eight A, or (b) for the payment of delinquent principal and interest on the original indebtedness to the extent that the aggregate amount outstanding at any one time when added to the balance due on the original indebtedness shall not exceed the amount originally secured by the mortgage or the sum of the outstanding balance due and three delinquent periodic payments of principal and interest, whichever is greater; and (ii) the interest rate on any such note and mortgage, after any such revision, shall not be in excess of the interest rate on the existing note and mortgage so revised. The provisions of paragraph 4 of section six of chapter one hundred and sixty-seven E relative to loan to value requirements shall not apply to a bank, as defined in said chapter one hundred and sixty-seven E, in any revision made pursuant to this section. Any revision in the terms of a mortgage pursuant to this section may be made without the consent of the holders of junior encumbrances and without loss of priority and shall not be construed so as to grant to any such holder of a junior encumbrance rights which, except for said revision, he would not otherwise have. No such mortgage amended or revised pursuant to this section shall be construed to be a rewritten or refinanced mortgage loan.
Terms Used In Massachusetts General Laws ch. 183 sec. 63A
- Credit report: A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. Source: OCC
- Fixed Rate: Having a "fixed" rate means that the APR doesn't change based on fluctuations of some external rate (such as the "Prime Rate"). In other words, a fixed rate is a rate that is not a variable rate. A fixed APR can change over time, in several circumstances:
- You are late making a payment or commit some other default, triggering an increase to a penalty rate
- The bank changes the terms of your account and you do not reject the change.
- The rate expires (if the rate was fixed for only a certain period of time).
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
- Variable Rate: Having a "variable" rate means that the APR changes from time to time based on fluctuations in an external rate, normally the Prime Rate. This external rate is known as the "index." If the index changes, the variable rate normally changes. Also see Fixed Rate.
In any such revision made, subsequent to a notice to the mortgagor of a default in the terms of a mortgage or the commencement of a foreclosure procedure against the mortgagor pursuant to the terms of said mortgage, the amount permitted in clause (i) of the preceding paragraph may be exceeded, for the purpose of curing such default or preventing such foreclosure, without loss of the validity of said mortgage and without loss of the priority thereof for the amount loaned or advanced pursuant to said clause (i). Any amount loaned or advanced in excess of the maximum amount permitted pursuant to said clause (i) shall be recorded as an encumbrance on the real estate securing the mortgage hereby revised which shall be subordinate to all junior encumbrances of record on said real estate at the time any such excess amount has been loaned or advanced, except as to the holder of any such junior encumbrance which has consented, in writing, to be subordinated to said encumbrance and such written consent has been recorded.
Notwithstanding the provisions of section sixty-three, a holder of any such mortgage may charge a fee in connection with any such revision not to exceed one percent of the outstanding balance of the existing note and mortgage as of the date of any such revision or of the revised balance pursuant to such revision, whichever is greater, and, in addition, an amount not to exceed one-quarter of one percent of said outstanding or revised balance for the acquisition of a current credit report on said owner of the equity of redemption and for administrative expenses incidental to the preparation and execution of documents related to such revision. Such holder shall not assess any additional fees, points, so-called, or similar charges on the said owner of the equity of redemption for any such revision.
For the purposes of this section, the term ”rewritten or refinanced mortgage loan” shall mean a loan that requires originating or underwriting services similar to an original mortgage application.