As regulators prepare to implement the new Massachusetts predatory-lending law on Nov. 7, emergency regulations are likely to be issued by that date, according to Jim Dougherty, executive director of the Massachusetts Mortgage Association, Wakefield, Mass.These regulations could more clearly define and satisfy Standard and Poor's on the issue of indeterminate liability, he said. Beginning Nov. 7, S&P says it will not permit "high cost home mortgage loans" governed by the Massachusetts Predatory Home Loan Practices Act into its rated structured finance transactions, because purchasers of such loans may be subject to indeterminate liability. "It's too vague in regard to the standards the lender must meet under the law," Mr. Dougherty said. The Massachusetts act has been questioned by many industry insiders who say it fails to provide clear guidance, so that lenders have no way of knowing -- if they refinance a loan, for example -- whether a loan would be considered in the "borrower's interest."

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