Yes, you can sell a house in foreclosure in Massachusetts. In Massachusetts, you can sell your home anytime during the foreclosure process until the foreclosure auction is completed. Once the auction occurs and the property is sold to a new owner, you no longer have the legal right to sell the property.
Massachusetts Foreclosure Timeline
From the day you default on your loan, the foreclosure process won’t take less than six months.
Late Payment
The first day you’re late for your mortgage payment is typically the 16th day of the month. Banks and lenders usually extend a 15-day grace period. Expect to receive calls and letters from the bank reminding you to take care of payment.
Default
After 30 days without making a payment, your lender will consider the loan to be in default. Once a mortgage loan defaults, your bank or lender’s aggressiveness and effort to receive payment will increase. They can also begin the foreclosure process when they see fit by sending a right-to-cure notice.
Right To Cure Notice
The “Right To Cure” refers to a loanee’s right to make all of their delinquent payments before the total default of their loan. The Right To Cure Notice says the bank can begin foreclosure if you don’t get caught up. A mortgage must send a 150-day Right to Cure Notice that strictly conforms to the “(150 Day) Right to Cure Your Mortgage Default” form. If the borrower fails to respond to the foreclosing entity, the bank can reduce the timeframe to 90 days.
Acceleration Notice
If homeowners cannot cure their debt, their bank will trigger the home mortgage acceleration clause and send an acceleration notice. This notice states the bank’s intent to foreclose on the property if the entire mortgage balance (including interest and penalties) isn’t paid. Loan acceleration means the borrower can no longer pay off the outstanding balance in installments. This will be the bank’s last attempt to collect the unpaid mortgage value, not just the missed payments.
Notice Of Trustee Sale
After the Land Court issues a judgment, the lender’s attorney or trustee will schedule a sale date for the property. To legally hold a sale, the bank must publish notice of the sale in the newspaper for three consecutive weeks and send the homeowner notice of the sale date at least 14 days ahead. The time from the notice to the auction date varies but is usually between 1 and 3 months.
Auction
The foreclosure sale occurs at the property at the time and date indicated by the foreclosing entity. The notice of trustee’s sale will state the minimum opening bid for the property. The opening bid is calculated based on the property value, outstanding loans, liens, unpaid taxes, and costs associated with the sale. The bank will sell the property to the highest bidder, who must record a foreclosure deed and file at the Registry of Deeds.
Eviction
Eviction is the last step in the Massachusetts foreclosure process. After the foreclosure sale, the new owner must bring an action in the housing court to evict the occupant lawfully.
How Selling a Home in Foreclosure Differs from a Traditional Sale
- Time Constraints: When your home is in foreclosure, you’re working against the clock. The foreclosure process in Massachusetts moves relatively quickly, so you have a limited window to find a buyer and close the sale before the lender takes possession of the property.
- Lender Approval: Unlike a traditional sale, where you have complete control over the sale process, selling a home in foreclosure often requires approval from your lender. The lender has a financial interest in the property and wants to ensure that the sale price is sufficient to cover the outstanding mortgage balance and any associated fees. Sometimes, lenders allow short sales (we’ll talk about that briefly).
- Limited Marketing Time: Due to the time constraints of the foreclosure process, you may have less time to market your property. This can make it challenging to attract potential buyers and negotiate your home’s best price.
- Stigma: Foreclosure homes can sometimes carry a stigma, which may deter some buyers. This can be due to the perception that the property may be in poor condition or that the sale process could be more complicated.
- Condition of the Property: If you’ve been struggling financially, your home may have suffered. This can affect the sale price and its attractiveness to potential buyers.
- Liens: Besides missing mortgage payments, homeowners sometimes have liens from other entities, such as the IRS and creditors, on their property. Most traditional buyers won’t buy a house with unpaid liens.
Some Friendly Advice From Real Estate Experts
The #1 thing you do NOT want to do is ignore lenders. If they don’t hear from you, your lender can change the 150-day process to 90 days. Keep them informed on your intention to sell or make your mortgage current.
Here are some options:
Sell the home for market value with a reputable real estate agent. You will have until the day before the foreclosure sale to pay the bank off in full. Some mortgage lenders will put your foreclosure on hold while you actively list your home for sale. When it goes up on the MLS, send them your MLS listing and ask for a 60 or 90-day forbearance. They may say no, but it’s worth an ask.
- Apply for a loan modification. Depending on your income, your lender may be willing to temporarily or permanently modify the terms of the original mortgage to rectify the delinquency. You have to ask for an application, so call and ask.
- You also may have the option to file Chapter 13 Bankruptcy, which will immediately halt the foreclosure action for as long as the bankruptcy remains active. Do not attempt to file Bankruptcy yourselves. It’s far too complicated, and a reputable attorney should be consulted.
- If your home is in foreclosure, you have multiple liens, and your property is in distress, you can sell to a We Buy Houses company. They can solve multiple problems, including taking on a property in debt that needs massive repairs.
- If you owe more on your mortgage than your home is worth, a short sale might be an option. With the lender’s approval, this involves selling the home for less than the outstanding mortgage balance.
If you plan on selling your home, you want to act quickly. You’ll need a written offer before it reaches auction (and a closing scheduled). However, avoid falling into fraudulent foreclosure avoidance schemes and We Buy Houses Ripoffs. Not all companies are as reputable as New England Home Buyers!
Selling A House In Foreclosure In Massachusetts
Act quickly if you’re facing foreclosure and wish to sell your home. The earlier you start the process, the more time you’ll have to find a buyer and complete the sale before the foreclosure auction. Consulting with a real estate attorney or a professional experienced in foreclosure sales can guide you on the best course of action based on your situation and the foreclosure process timeline in Massachusetts.
