Healey signed a law protecting an embattled mortgage lender linked to a donor. Fellow Democrats are now pushing back.
By Globe Staff
Last year, Governor Maura Healey dismayed advocates when she signed into law protections for a Boston nonprofit that has been battling accusations of predatory lending for years. Now her Democratic colleague down the hall is proposing sweeping regulatory changes that would clamp down on BlueHub Capital.
The regulations, outlined in an eight-page proposal published by state Attorney General Andrea Campbell’s office last week, put the state’s top prosecutor at odds with Healey, her predecessor, who last year signed a bill that exempts BlueHub from the state’s consumer protection laws.
Many of Campbell’s proposals also appear in a bill filed by state Representative Michelle Dubois, a Brockton Democrat whose district is home to dozens of families who participated in the BlueHub program at the center of ongoing litigation.
Under a program the nonprofit calls BlueHub SUN, BlueHub buys properties from banks that are foreclosing on the homeowners, then resells them to the original owners.
As part of the deal, the homeowners take on what is known as a shared appreciation mortgage — a relatively rare type of real estate loan that entitles BlueHub to a portion of any increase in the home’s value when the homeowner sells or refinances the property.
In a statement, BlueHub spokesperson Autumn McLaughlin wrote that BlueHub “completely support[s] regulations that align with the intent and spirit of the law [Healey signed in 2024].” She said that the nonprofit intends to provide comments on the changes during the 27-day public comment period, after which Campbell’s office will finalize the new rules.
The proposed regulations do not specifically name BlueHub; however, the rules as drafted would require BlueHub to share with homeowners the maximum amount that could be due under the shared appreciation mortgage and disclose that the loan includes a so-called balloon payment, or a one-time payment due to BlueHub at the end of the loan term.
The proposed regulations also would bar BlueHub from making false promises to influence someone to sign a shared appreciation mortgage application or steer them away from hiring a lawyer to review the application. Both echo accusations by homeowners who sued BlueHub Capital in 2020, alleging the nonprofit engaged in “predatory lending.”
“I feel like it was the only reasonable move the AG could make,” said Jeffrey Wiesner, a partner at the law firm Wiesner McKinnon LLP who represents the homeowners in that lawsuit.
In 2024, homeowners and state officials alike were shocked when the Legislature included a proposal to legally protect BlueHub, one of hundreds of policy riders lawmakers tacked onto a nearly $4 billion economic development bill. The measure was approved as part of a bundle of amendments without debate on the floor or a roll-call vote.
Specifically, the language states that lenders utilizing shared appreciation mortgages would not be liable “for monetary relief, injunctive relief or other equitable relief at common law or by statute” as long as it gives a homeowner “full disclosure” of any shared appreciation requirement. Homeowners and consumer advocates immediately saw that the measure would benefit BlueHub, which is the only nonprofit entity in the state that offers such a loan.
In September, Campbell told GBH News she was troubled by the measure.
Activists urged Healey to veto the language, but to no avail. On Nov. 20, the governor signed the $4 billion economic development bill into law.
McLaughlin, the BlueHub spokesperson, told the Globe for this story that “the legislature understood the value of regaining and retaining homeownership when it passed this law last session, and the fact that we need workable regulations to help families avoid the devastating impacts of foreclosure and eviction.”
But long before the law passed in 2024, homeowners had raised concerns about BlueHub’s practices. More than a dozen complaints from consumers to the state’s Division of Banks dating back to 2015, illustrate the frustration, according to documents obtained by the Globe.
One homeowner told regulators in 2016 that the organization was “a loan shark” and that they had tried to reach out to BlueHub multiple times “for some mercy.”
Another consumer in 2020 wrote to the banking regulator that BlueHub and its affiliates were “conducting sharecropping practices on their customers.”
“They are taking advantage of low-income communities as well as people of color,” the consumer wrote. “They present themselves as sheep but are wolves in sheep’s clothing.”
In a statement, McLaughlin, the Bluehub spokesperson, said that “in each complaint the DOB reviewed it found that BlueHub acted appropriately”
In a recent interview with the Globe, Boston homeowner Annie McKnight said the 47 percent shared appreciation mortgage BlueHub has on her Hyde Park colonial means that, at 72 years old, she can’t afford to downsize or bequeath the house to her children.
She said at the time, she was at risk of losing her home and that the BlueHub loan officer who approached her “was not forthcoming” about the terms.
“They said if you don’t sign today, we can’t do anything for you … to me, that just says you are stealing my home,” McKnight said of the house she’s lived in since 1978. “You’re stealing any kind of investment I might make in this house. You’re stealing any opportunity I have to have any kind of legacy or build wealth.”
BlueHub officials say their Stabilizing Urban Neighborhoods Initiative, or SUN, program has helped 558 Massachusetts homeowners who were in danger of foreclosure.
According to the 2020 lawsuit, dozens of people in Massachusetts who borrowed from BlueHub — which at the time was known as Boston Community Capital — said they discovered belatedly that they had agreed to a shared appreciation mortgage, and that they were misled about what they were signing up for. The borrowers said they had no lawyer at the closing and no one adequately explained the agreement, which included a requirement that they not talk about the terms of the deal, according to the lawsuit.
After Healey signed the bill into law, some drew connections between the governor and BlueHub’s longtime chief executive, Elyse Cherry, who have known each other for decades.
Bruce Marks, chief executive of Jamaica Plain-based Neighborhood Assistance Corporation of America, which has helped finance the lawsuit against BlueHub, said the signing represented “the corruption of the Massachusetts governor.”
In a Boston Business Journal story last year recognizing Cherry, Healey called her a “trailblazer in so many ways,” and lauded Cherry’s work on LGBTQ issues, community development, and affordable housing. Cherry has also helped raise money on Healey’s behalf. When she signed the bill last year, Healey told reporters she hadn’t had “any conversations” with Cherry about the legislation.
Shortly after the bill signing, Wiesner and other consumer advocates met with Campbell and her staff to discuss how to protect homeowners despite the legal immunity given to Bluehub.
The regulations Campbell’s office proposed this week mirror a number of the ideas floated during that discussion, though Wiesner said that the new law raises questions about what could happen if BlueHub violated the new rules.
“[The 2024 law] is a huge barrier to enforcing the regulations,” Wiesner said. “If you can’t enforce the regulations, then the company can get away with violating them.”
The proposed regulations, however, do say that while shared appreciation mortgage lenders are exempt under the new law, they can still be held liable for “unfair or deceptive marketing, servicing, underwriting, and collection acts or practices.”
This, Andrea Bopp Stark says, is crucial.
“I do feel they really listened to the concerns of consumers,” said Bopp Stark, a senior attorney at the National Consumer Law Center who also met with Campbell in December. “I think it’s a really great start. It’s thoughtful and really tries to protect the borrower.”
Campbell’s proposal will hold a public hearing on the proposed rules on Aug. 7.
Portuguese 
English 
Spanish 
French 
Chinese