Foreclosure & Alternatives Law
There are many factors that can put Massachusetts homeowners at risk of foreclosure. Incurring medical debts, losing a job or a change in financial status resulting from a divorce are only a few reasons that many people give for failing to make timely mortgage payments on their property.
Compared to some other states, the Massachusetts foreclosure process is quite rapid. Under certain circumstances, the whole process can be over in as few as 90 days. This makes it especially important for the homeowner to act quickly if an attempt will be made to halt the foreclosure process.
In Massachusetts, the most common foreclosure process is non-judicial under power of sale. However, foreclosure by possession is another legal method that can be used after the homeowner has defaulted on one’s mortgage. Using this method, there are three ways to accomplish the foreclosure.
The first method entails the mortgage holder using the judicial system to obtain a court order. They may also take possession of the property by entering peaceably or by consent of the homeowner in default. If the mortgage holder maintains peaceable possession of the property for a three-year period from the date of possession, the former homeowner loses all redemption rights.
When a power of sale clause is part of a deed of trust or mortgage, the non-judicial foreclosure process takes place. This clause is a pre-authorization from the borrower to the lender allowing the lender to sell the property in order to pay the loan balance when the borrower defaults on the mortgage. The lender may designate the power to sell the property to a trustee. The specific terms, time and place of the sale must be carried out according to the power of sale clause.
Before the lender may initiate the foreclosure process, the mortgage holder must send a registered letter to the homeowners as a 150-day notice informing them of their right to reinstate their mortgage and let them know that they may qualify for assistance from a state agency. If the lender has made an effort in good faith to negotiate a foreclosure alternative with the borrower but was unable to resolve the matter satisfactorily, or if there is no response from the borrower to offers of negotiations, this period can be foreshortened to only 90 days.
Once the loan is accelerated, the mortgage holder must mail another notice to the borrower no fewer than 14 days from the date of sale of the property. Additionally, the notice has to be published weekly for three weeks in a newspaper published in the county where the property to be sold is located. The first publication of the notice must be no fewer than 21 days before the property is to be sold. The notice must list the date, time and place of the hearing on the foreclosure and include the borrower’s name, the terms of the sale, amount of the default and date the mortgage was recorded.
Once those conditions have been met, the sale shall be conducted at a public auction at the place, time and date indicated in the sale notice. The property is then sold to the highest bidder, and the former homeowner has no rights to redeem the property at any later date.
Because there are some Massachusetts cities with ordinances in place that require lenders to take part in foreclosure mediation with the borrowers, it’s a good idea to get legal counsel to help you find alternatives to foreclosing on your property.