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Understanding Massachusetts’ Foreclosure Process
To determine the point of no return in foreclosure, you need to understand Massachusetts procedure. Unlike some other states, Massachusetts primarily employs a non-judicial foreclosure process, which means the lender doesn’t need to go to court to foreclose on your home.
Here’s a quick rundown:
- Missed Payments: Mortgage payments are typically due on the first of the month. If you’re late on a payment, your bank or lender will extend a 15-day grace period.
- Default: After 30 days without making a payment, your lender will consider the loan to be in default.
- Right To Cure Notice: The first step after default is the bank sending a Right To Cure Notice. This notice states that the bank can begin foreclosure proceedings if you don’t get caught up on their payments.
- Acceleration Notice: An acceleration notice tells you to pay off your entire mortgage immediately. You also need to pay all the interest and fees. Lenders can do this because of the mortgage acceleration clause.
- File Complaint: Under Massachusetts law, the foreclosing entity will file a complaint with the Massachusetts Land Court. Know that Massachusetts is a non-judicial foreclosure state. This means borrowers do not get their day in court to dispute the foreclosure.
- Notice Of Trustee’s Sale: After the Land Court issues a judgment, the lender’s attorney or trustee will schedule a sale date of the property. The bank must publish notice of the sale in the newspaper for three consecutive weeks. They must also send the homeowner notice of the sale date at least 14 days ahead.
- Auction: The foreclosure sale occurs at the property at the time and date indicated by the foreclosing entity.
- 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.
We wrote an in-depth blog on the Massachusetts Foreclosure Process, reviewing every step from the first missed payment to the auction.
Foreclosure Auction: Your Last Chance
Once the foreclosure auction occurs, it is too late to reclaim your home and stop the foreclosure. Massachusetts law.
How to Prevent Reaching the Point of No Return
While understanding the endpoint is crucial, it’s equally vital to know how to avoid reaching it:
- Engage with Your Lender Early: As soon as you foresee difficulties making payments, contact your lender. They might offer modifications, repayment plans, or even a forbearance period. They legally cannot discriminate against you and MUST follow Massachusetts law to begin a foreclosure.
- Legal Counsel: A lawyer experienced in Massachusetts foreclosure laws can guide you on potential defenses and negotiations or identify any procedural errors in your foreclosure process. For example, a violation of Massachusetts’ high-cost home loan law allows the borrower to cancel the loan and use rescission as a defense.
- Foreclosure Prevention Programs: The state-funded Residential Assistance for Families in Transition (RAFT) program is available to low-income homeowners at risk of foreclosure.
- Bankruptcy: As a last resort option, filing for Chapter 7 Bankruptcy can delay foreclosure proceedings for about 3-5 months. Filing for Chapter 13 can give you up to five years to repay outstanding debts, including your mortgage.
- Sell Your Home: If you have equity in your home, it may be wise to sell. You can use the proceeds to repay the mortgage and walk away with some money. This will avoid foreclosure and associated credit damage. Depending on how far along you are in the foreclosure process, you may need to facilitate a quick sale
- Short Sale: Working with your lender to sell your home for less than what you owe on your mortgage. The lender agrees to forgive or forget the difference if the sales price exceeds your mortgage balance.
Does Massachusetts Have A Redemption Period?
Some states have a redemption period after the foreclosure sale. During this period, a foreclosure homeowner can repurchase their home. In Massachusetts, there’s no statutory post-sale statutory right of redemption.
Massachusetts is a non-judicial state, meaning two things:
- Lenders can force the sale of a home to cover a debt without going to court.
- You won’t have a right to redeem.
You’ll only hold this right in a judicial foreclosure, which is rare in Massachusetts. You will lose your home if you don’t redeem your mortgage or take other action.
I Still Live In The Home, Does This Mean I Have A Chance?
After a foreclosure sale, homeowners might still reside in the property until the eviction process is completed. This doesn’t mean the foreclosure can be reversed, it offers homeowners a window to arrange alternative accommodations.
Stopping A Foreclosure In Massachusetts
In Massachusetts, the foreclosure auction signifies the point of no return for homeowners. However, the journey to that point offers several opportunities to stop this process. Homeowners can navigate this challenging path by understanding the timeline and being resourceful and proactive.
Contact the New England Home Buyers team if you’re in the middle of a foreclosure and need to sell your house fast.
