Massachusetts Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Security Instruments: Mortgage, Deed of Trust
Right of Redemption Period: Varies
Deficiency Judgments Allowed: Varies
Time Frame: Typically 90 Days
Public Notice: Complaint
Massachusetts is a title theory state, which means that a property title will remain in trust until the loan on the property is paid in full. A title in Massachusetts can be secured by either a mortgage or a deed of trust. Both documents serve the same purpose.
The state allows for two types of foreclosures in the event that a borrower defaults on their loan. Lenders may choose to foreclose on a mortgage or deed of trust through either judicial or non-judicial foreclosure proceedings.
There is no standard right of redemption period in Massachusetts, which would allow a borrower to reclaim their property in the event that it is foreclosed if they can satisfy the loan and any other costs, however, a right of redemption period may be permitted in judicial foreclosures. Deficiency judgments may be obtained only in certain situations. If the property is sold for less than the amount of default, the lender may not try to sue the borrower for the difference.
Types of Foreclosures Allowed in Massachusetts
Massachusetts statute allows for judicial foreclosures on defaulted property. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
The lender must file a lawsuit against the mortgagor to begin the process of foreclosure, along with a Lis Pendens, which is a recorded document proving public notice that a property is being foreclosed. Once an Order to Foreclose is obtained by the court, the lender may take possession of the property peacefully with consent of the borrower. If the lender maintains possession of the property for three (3) years, the borrower loses their rights of redemption. This type of process is also known as foreclosure by possession.
The state of Massachusetts also allows for a non-judicial foreclosure, which is also known as foreclosure by power of sale. In order for non-judicial foreclosures in Massachusetts to be possible, the loan documents must contain a power of sale clause. The purpose of the clause is to authorize the lender to sell the property in the event of default to be able to recover what is owed on the property.
As opposed to judicial foreclosures, non-judicial foreclosures do not require court supervision for a defaulted property to be sold.
There are two ways in which a non-judicial foreclosure in Massachusetts can proceed. If the power of sale clause states a specific time, place, and outlines terms of sale, then the lender must follow the procedure that is stated. If there is no specification, then the sale must follow the following power of sale guidelines:
Power of Sale Guidelines:
1. Lender must record a notice of foreclosure in the county where the property is located before initiating a foreclosure.
2. The notice of foreclosure sale must be served on the borrower through either registered or certified mail at least fourteen (14) days before the scheduled sale date. The notice must contain specific details regarding the sale, such as date, time and place.
3. In addition, the notice must be published once a week for three (3) weeks in a newspaper that is local to the county where the defaulted property is located. The first publication must be printed at least twenty-one (21) days before the scheduled sale.
4. The defaulted property will be sold at auction by a private auctioneer based on the specifications in the notice. The highest bidder will claim the property.
Working with a Foreclosure Lawyer in Massachusetts
Being served with a foreclosure complaint can be extremely emotional, however, there is still hope for you to prevent the repossession of your home. If you are behind on your mortgage payments or have already received a foreclosure notice, turn to a leading foreclosure lawyer in Massachusetts for help right away.
Foreclosure attorneys work diligently to come up with a plan of action to present to your lender in lieu of foreclosure. Some examples might include mortgage modification, refinancing or even a temporary halt in payments. Rest assured that no matter which alternative is proposed, your case will end positively with the help of a top foreclosure attorney.
Contact a skilled team of foreclosure lawyers in Massachusetts today to prevent your home from being repossessed.