The company acquired ResX Warehouse Lending from People's United Financial.
People's United in Connecticut is letting the loans run off its books as it invests in higher-yielding commercial loans.
The Massachusetts savings bank will gain branches in two communities as part of the acquisition.
One found a buyer, another announced plans to retire, and others took steps to reinvent their banks.
The company will pay about $58 million in cash for Melrose Bancorp.
The company will pay $122 million for six branches and nearly $1 billion in assets.
Hometown Financial, which completed three acquisitions this year, is considering branch openings for a push into the city.
Dorothy Savarese will remain the Massachusetts thrift's chairman and CEO.
Their challenge is creating a viable, profitable product that doesn't get flagged for being predatory.
The Boston company said the loan participation went into default due to potentially fraudulent activity.
