Performance Tests, Standards, and Ratings, in General

(1) Performance Tests and Standards. The Commissioner assesses the MLCI performance of a mortgage lender in an examination as follows: Mortgage Lender Performance Standards. The Commissioner applies the lending and service tests, as provided in 209 CMR 54.22 and 54.23 in evaluating the performance of a mortgage lender. However, a mortgage lender that achieves at least a "satisfactory" rating under both the lending and service tests may warrant consideration for an overall rating of "high satisfactory" or "outstanding" depending on the mortgage lender’s performance in making qualified investments and community development loans to the extent authorized under law, in accordance with 209 CMR 54.61(2)(c). (2) Performance Context. The Commissioner applies the tests and standards in 209 CMR 54.21(1) in the context of: (a) demographic data on median income levels, distribution of household income, nature of housing stock, housing costs, and other relevant data pertaining to the Commonwealth; (b) any information about lending and service opportunities in the Commonwealth maintained by the mortgage lender or obtained from community organizations, state, local, and tribal governments, economic development agencies, or other sources; (c) the mortgage lender’s product offerings and business strategy as determined from data provided by the mortgage lender in the Commonwealth; (d) the mortgage lender’s capacity and constraints, including the size and financial condition of the mortgage lender, the economic climate (national, regional, and local), safety and soundness limitations, and any other factors that significantly affect the mortgage lender’s ability to provide lending or services in the Commonwealth; (e) the mortgage lender’s past performance and the performance of similarly situated lenders in the Commonwealth; and (f) any other information deemed relevant by the Commissioner. (3) Assigned Ratings. The Commissioner assigns to a mortgage lender one of the following five ratings pursuant to 209 CMR 54.25 and 54.61: "outstanding"; "high satisfactory"; "satisfactory"; "needs to improve"; or "substantial noncompliance" as provided in M.G.L. c. 255E, § 8. The rating assigned by the Commissioner reflects the mortgage lender’s record of helping to meet the mortgage credit needs of the Commonwealth, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the mortgage lender. (4) Safe and Sound Operations. 209 CMR 54.00 does not require a mortgage lender to make loans or investments or to provide services that are inconsistent with safe and sound operations. To the contrary, the Commissioner anticipates mortgage lenders can meet the standards of 209 CMR 54.00 with safe and sound loans, investments, and services on which the mortgage lender can expect to make a profit. Mortgage lenders are permitted and encouraged to develop and apply flexible underwriting standards for loans that benefit and are suitable for low- and moderate-income geographies or individuals, only if consistent with safe and sound operations.