Don’t get caught off guard if you’re facing an impending foreclosure in Massachusetts. Read on to find out each step in a Massachusetts foreclosure—from missing your first payment up until an eviction after the sale—and learn about your rights during the process.
Under federal law, the mortgage servicer usually has to wait until you’re more than 120 days delinquent on your mortgage payments before officially starting a judicial or nonjudicial foreclosure. (Learn more about when foreclosure may begin.)
This 120-day period is supposed to give you sufficient time to explore loss mitigation opportunities, like a loan modification, forbearance, or repayment plan. (Learn more about federal laws that protect homeowners who are facing a foreclosure.)
Residential foreclosures in Massachusetts are typically nonjudicial, which means the foreclosure happens outside of the state court system. (Nonjudicial foreclosures are also called “power of sale” foreclosures. For more information on this topic, see What is a Power of Sale Foreclosure?)
Because most Massachusetts foreclosures are nonjudicial, that process is described below.
The foreclosing bank must personally deliver or mail a notice to the borrower giving 90 days to bring the loan current (called “curing the default”). The borrower gets the right to cure the default once during any five-year period. (Mass. Gen. Laws ch. 244, § 35A).
Some homeowners who have a particular type of loan also get a notice about the right to apply for a loan modification. If you don’t cure the default, you might also get an acceleration notice, if the mortgage requires one. (To learn more about the 90-day and modification notices, see Massachusetts Foreclosure Prevention Laws.)
The bank has to mail the borrower a “Notice of Intent to Foreclose and of Deficiency After Foreclosure of Mortgage” at least 21 days before the sale date, if it wants to get a deficiency judgment (see below). (Mass. Gen. Laws ch. 244 § 17B).
In a Massachusetts nonjudicial foreclosure, the bank will likely file a lawsuit, often called a servicemember’s case, in the Superior Court Department or the Land Court Department of the Trial Court for a determination as to whether the homeowner is entitled to protections under the federal Servicemembers Civil Relief Act (SCRA). The SCRA provides military servicemembers with certain protections against a foreclosure while they’re on active duty. Even though a servicemember’s case isn’t a required part of the Massachusetts foreclosure process, banks often will file this suit so that the borrower can’t later claim that the foreclosure was invalid because the bank failed to comply with the SCRA. (To learn more see, Foreclosure Protections for Military Servicemembers Under Massachusetts Law.)
The bank then publishes a notice of sale once a week for three weeks and mails the notice to the homeowner at least 14 days before the sale. (Mass. Gen. Laws ch. 244 § 14).
At the foreclosure sale, the property is sold to the highest bidder. Often, the bank buys the home at the foreclosure sale by making a credit bid.
If the bank buys the home at the sale, the property becomes known as “REO.”
If the borrower’s total mortgage debt is more than the price that the home sold for at the foreclosure sale, the difference is called a “deficiency.” Some states, including Massachusetts, allow the bank to seek a personal judgment—called a “deficiency judgment”—against the borrower for this amount.
In Massachusetts, the bank may get a deficiency judgment after a nonjudicial foreclosure if it:
If you don’t leave the property after the foreclosure sale, the new owner will probably:
With cash-for-keys, the new owner offers you money in exchange for you agreeing to move out. This transaction is cheaper and faster for the new owner than taking you to court for an eviction.
An eviction process starts with a notice to quit, followed by a lawsuit. (Read more about evictions after foreclosure.)
If you have questions about the foreclosure process in Massachusetts or want to learn about potential defenses to a foreclosure, consider talking to a foreclosure attorney. It’s also a good idea to talk to a HUD-approved housing counselor if you want to learn about different loss mitigation (foreclosure avoidance) options.