By Bill Forry

A push to regulate the state's booming mortgage industry is picking up steam this summer on Beacon Hill. The real battle is taking shape here in the neighborhood, where Dorchester's own Mass Affordable Housing Alliance (MAHA) has galvanized an effort to push a bill into law by year's end.

Modeled loosely on existing laws governing the banking industry, the bill would track mortgage companies in the state, rate their performance, and even pull their license if they fail to meet certain standards.

The same bill was passed by the Senate last year, but failed to get in front of House lawmakers before the end of the legislative calendar. Right now, the bill is being reviewed again by the Joint Legislative Committee on Banks and Banking, and is thought to have a good shot at making it to the Governor's desk. And with MAHA and its feisty homebuyer's union ramping up a lobbying effort, its chances are getting a whole lot better.

The Dot Ave.-based coalition is best known for pioneering the Soft Second loan in Massachusetts. Taking a page from the labor movement, MAHA used collective bargaining to pressure big Boston banks to commit millions each year to low interest mortgage loans for qualified first-time homebuyers. The result: thousands of Soft Second home purchases across the state, with the heaviest concentration right here in 02124.

MAHA's battle to convince Boston's banks to play ball didn't happen in a vacuum. Since 1990, federal law has compelled banks to meet standards set up by the Community Reinvestment Act (CRA). The principle was short and sweet: if you have a bank branch in a place like Dorchester, and make money off the deposits there, you should be putting some of that cash on the table when customers need it most: to buy their house. By keeping close tabs on the bank industry's trends &emdash; and rating banks on their performance in city neighborhoods &emdash; the CRA has led to a spike in home sales to minorities and low-income residents across the board.

Now, 13 years later, the landscape of the mortgage business in the state has changed dramatically. In 2001, banks accounted for only 26 percent of mortgage loans in the state, compared with 78 percent in 1990. The huge difference has been picked up by mortgage companies, many of them affiliated with out-of-state banks, which are not subject to the scrutiny of the CRA laws.

"If the trend continues, banks will pretty much be out of the mortgage lending business in another five years," says Tom Callahan, director of MAHA. "We're trying to prepare for that day and we'd be silly not to look at this 10-year-old trend and react to it."

According to UMass Economics Professor Jim Campen, who has spent the last 10 years analyzing mortgage data in Boston, the trend towards unregulated mortgage lenders has been largely negative for city residents.

"Even if they're not the worst kind of predator, if they begrudge you a point, for instance, that still adds up. People may not be losing their home, but they're getting hit for higher prices," says Campen.

Most serious, Campen claims, is a kind of lending "redlining" that he has chronicled in a series of yearly reports. According to Campen, neighborhoods like Dorchester, with high percentages of black and Latino borrowers, have become fertile ground for subprime loans &emdash; which have higher interest rates and fees, many of them predatory in nature. According to Campen, 29 percent of the home loans in Mattapan and Roxbury were subprime in 2001, compared to 2.7 percent in Charlestown, Back Bay, and Beacon Hill. Campen says that since none of the subprime lenders now doing business in the city, such as H&R Block and Washington Mutual, are affiliated with a Massachusetts bank, none of their loans can be scrutinized under the CRA.

The proposed legislation would change that for the most of the large, non-bank lenders in the state, authorizing the state's Division of Banks to track their loans and score their performance.

According to Callahan, the fate of the Mortgage CRA bill remains in the hands of lawmakers on the Banks and Banking Committee this month, but action is expected by early September. At a meeting next Tuesday, MAHA members and Dorchester state reps Marie St. Fleur and Shirley Owens-Hicks will gather on Dot Ave. to map out a strategy. On August 4, a similar session is planned with Dorchester rep Marty Walsh and Brighton rep Kevin Honan.

"We have a great team in both Senate and House," says Callahan. "Senators Jack Hart and Jarrett Barrios have been a very active and an engaged team."

For more on the Mortgage CRA bill and MAHA's campaign, read Florence Hagins's commentary on page 10 of this week's Reporter.

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Kevin Joyce, the commissioner of the city's Inspectional Services Department, says he's losing patience with the owner of an abandoned Burger King on Morrissey Boulevard. Joseph Tagliente, president of Tage Corp., had has already been slapped with code violations for the condition of the grafitti-smeared, weed-infested property. At a meeting on the property in June, Tagliente promised Joyce he would clean the place up. So far, though, he has not delivered.

"As late as [July 11], [Tagliente] said he'd have a crew out there. So far, nothing. If there's no activity there soon, we'll wind up prosecuting Tagliente and putting a lien on the property," said Joyce.

Bill Forry can be reached at bforry@dotnews.com