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The Massachusetts Mortgage Bankers Association has come out against efforts to extend the state’s eviction moratorium past its Aug. 18 expiration date, saying “we strongly feel [it] will have an adverse impact to lending and recovery in Massachusetts.”

The MMBA is urging legislators on Beacon Hill to oppose bills filed by Reps. Mike Connolly and Kevin Honan and Sen. Patricia Jehlen that would extend the moratorium on evictions and foreclosures for one year after the governor lifts the current state of emergency. The bills would also freeze rents over the same time period, would presume any nonpayment of rents or mortgages was due to COVID-19 and allow small landlords owning up to 15 units to defer mortgage payments until the end of the mortgage if they lose income due to COVID-19. The bill also creates a fund to indemnify landlords of missed rent, with preference going to those with 15 units or less.

Housing advocates and rental housing industry groups warn the state could face up to 20,000 eviction filings when the freeze expires. The bill’s backers say they aim to get the bills through the legislature by July 20. The legislature shifts to informal sessions July 31, after which point a single legislator can block a bill.

In a letter sent to legislators today, the MMBA said that the law’s provision allowing any borrower to not pay their rent or mortgage without proof of financial hardship caused by COVID-19 should be changed to a requirement to provide documentation, as was required by the state’s initial eviction and foreclosure freeze. The MMBA also warned that the uncertain length of the moratorium, driven by the uncertain length of the state of emergency, could cause lenders to refuse to provide credit to Massachusetts homebuyers who would otherwise qualify.

The association also said many actions already taken by the state and federal governments provide many protections for homebuyers.

“Legislation should be crafted that only those financially impacted and unable to make rent payments can qualify; consumers need to provide some type of documentation to their landlord; and there needs to be an acceptable time
limit to this legislation,” the letter states.

The Massachusetts Bankers Association came out in opposition to the bill when it was filed June 30, warning of similar problems.

“Mandating that banks bear this burden at the same time policymakers are asking our industry to provide additional credit to assist with recovery efforts is not sustainable and will inherently force institutions to curtail or stop lending in other areas and increase the cost of credit for those who wish to
purchase homes in the future,” the letter warned. “Recovering from the pandemic will require efforts by the business community, state and local
governments and all Massachusetts residents. MBA and our member banks stand ready to work with you and your colleagues on initiatives to help rebuild our economy in the coming months.”

Diane McLaughlin and the State House News Service contributed to this report.