Mortgage Company Investment

A broad coalition of community groups, elected officials, and business leaders have called on state political leaders to pass legislation this year to extend the state Community Reinvestment Act to cover mortgage companies. The bill requires mortgage companies that make or buy more than 500 loans a year in the commonwealth to be subject to CRA. An identical bill passed the state Senate in July, 2002 on a 38-0 roll call vote.

Senators Jarrett Barrios (D-Cambridge), Andrea Nuciforo (D-Pittsfield), and Dianne Wilkerson (D-Roxbury) are the primary sponsors in the Senate and Representatives Marie St. Fleur (D-Dorchester) and Marty Walsh (D-Dorchester) are the lead sponsors in the House.

Mortgage lenders would be examined by the Division of Banks to see if they are making efforts to lend to traditionally underserved markets. By applying only to those mortgage companies that make more than 500 loans a year in Massachusetts, the legislation allows the Division to reach approximately 33,000 additional mortgage loans made in Massachusetts without discouraging smaller lenders from marketing their products here. The bill would cover twelve of top eighteen subprime mortgage lenders in Massachusetts which offer high interest rate refinance loans to many underserved populations.

The bill is also supported by the Massachusetts Bankers Association, Boston Mayor Thomas Menino, Newton Mayor David Cohen, Somerville Mayor Dorothy Kelly Gay as well as community groups like Citizens Housing and Planning Association, Massachusetts Association of CDC's, ACORN, Greater Boston Interfaith Organization, and the Fair Housing Center of Greater Boston. The bill has been endorsed by the Boston Globe and the New Bedford Standard-Times.

Read the Fact Sheet (53KB, MS Word 97 Format).
Read the CRA Bill (26KB, MS Word 97 Format).