We buy houses in Somerville Massachusetts. Understanding the foreclosure process in MA is an important part of navigating your own home foreclosure. As Somerville MA home buyers, we will help you understand what foreclosure generally means in our latest post.
Understanding The Foreclosure Process In Somerville MA
What Is Foreclosure In Massachusetts Anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally, after the borrower stops making payments.
Foreclosure is no fun. But just know that it’s not the end of the world.
When you know how foreclosure in MA works, it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.
The Basic Stages Of A Foreclosure In Massachusetts
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are judicial sale or power of sale.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Under Judicial Foreclosure In MA:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes, that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
Under Power Of Sale (Or Non-Judicial Foreclosure) In MA:
- The mortgage lender serves you with papers demanding payment and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction In MA?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state-by-state deficiency judgment laws, since every state is different.
Sell My House In Somerville MA
Generally, it’s best to avoid a foreclosure auction especially if you want to stay in your home. Instead, call up the bank or work with reputable real estate firms to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure. Experienced homebuyers in MA like New England Home Buyers can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell your house in Massachusetts to avoid foreclosure, we can help you. We offer cash for houses in Massachusetts and we buy properties in Somerville MA from people like you who need to sell fast.
Give us a call anytime (978) 228-1068 or fill out the form on this website today! >>
Another Foreclosure Resource For Somerville MA Homeowners: