The Massachusetts Division of Banks has issued emergency regulations for applications for refinancing taken on or after Nov. 7 under the recently enacted Massachusetts Predatory Home Loans Practices Act.The legislation prohibits knowingly refinancing a home loan within 60 months unless the refi is in the borrower's interest. Some lenders have reportedly pulled out of the refi market due to the provision, because it is not limited to high-cost home loans and increases the likelihood of contested foreclosures, according to the law firm of Kirkpatrick Lockhart LLP. The law firm said the emergency regulations fail to develop an objective standard so that a lender can determine at the time it makes a loan whether it satisfies the borrower's-interest test. However, it said the regulations provide some relief to lenders in that they limit the types of loans that are subject to the test. The regulations will remain in effect for 90 days, and the division will conduct a public hearing to receive comments on amending them or making them permanent.

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