If you fall far enough behind on your mortgage payments in Massachusetts, your loan servicer (on behalf of the lender or the subsequent loan owner, called an “investor”) will start a foreclosure, most likely a nonjudicial one. Massachusetts law sets out the specifics of the nonjudicial foreclosure process. Assuming you don’t successfully fight the foreclosure or work out a way to avoid it, your home is then sold to a new owner at a foreclosure sale.
While that explanation probably sounds pretty straightforward, Massachusetts foreclosure laws are complicated, and both federal and state laws give you rights throughout the process. Here’s a detailed description of what usually happens in a Massachusetts foreclosure so that you know what’s supposed to happen and what you can do if you want to try to save your home.
When Does Foreclosure Start in Massachusetts?
If the property is the borrower’s principal residence, in most cases, federal law requires the servicer to wait until the loan is more than 120 days delinquent before officially starting the foreclosure. The 120-day preforeclosure period is a good time to apply for loss mitigation if you want to try to avoid a foreclosure.
In some limited situations, though, the foreclosure can start earlier, like if you violated a due-on-sale clause or if the servicer is joining the foreclosure action of a superior or subordinate lienholder. (12 C.F.R. § 1024.41).
The Foreclosure Process in Massachusetts
While most Massachusetts foreclosures go through what’s considered a nonjudicial process, a court usually plays a minor role in the process. (Judicial foreclosures can also happen but are uncommon.)
Here's how the nonjudicial process typically works.
Preforeclosure Notice Requirement
For owner-occupied dwellings with four or fewer units, the borrower gets 90 days to cure the default. The foreclosing bank must hand deliver or mail a notice of default and right to cure to you. (Mass. Gen. Laws ch. 244, § 35A).
Also, for loans with high-cost, predatory, or unfair features, the bank has to send a notice along with the notice of default and right to cure that explains the right to pursue a loan modification. (Mass. Gen. Laws ch. 244 § 35B(c)).
Notice of Intent to Foreclose and of Deficiency After Foreclosure of Mortgage
If the bank wants to get a deficiency judgment (see below), it has to mail you a “Notice of Intent to Foreclose and of Deficiency After Foreclosure of Mortgage” not less than 21 days before the sale date. (Mass. Gen. Laws ch. 244 § 17B).
Servicemembers Civil Relief Act Notice
If you don’t cure the default during the 90-day reinstatement period, the bank will probably file a complaint (lawsuit) asking a court to determine whether you’re entitled to protections under the Servicemembers Civil Relief Act (SCRA). The bank will serve a copy of the complaint to you, which gives you the opportunity to file an answer stating whether you’re in the military. The purpose of this proceeding is to determine whether you’re in active military service—or recently discharged—and entitled to foreclosure protections under the SCRA.
Asking a court for a declaration from the court about the borrower's military status isn’t a required part of a nonjudicial foreclosure. But taking this step protects the bank against a later claim that the foreclosure was invalid because the bank failed to comply with the SCRA.
Foreclosure Notice of Sale
After ensuring that the foreclosure can proceed, the bank publishes a notice of sale once a week for three weeks, as well as mails a notice of sale to you at least 14 days before the sale. (Mass. Gen. Laws ch. 244 § 14).
Reinstating the Loan to Prevent a Foreclosure Sale
As discussed earlier, you get 90 days to cure the default and reinstate the loan before the foreclosure officially starts. Under Massachusetts law, you can exercise this right to cure only once during any five-year period. (Mass. Gen. Laws ch. 244, § 35A).
Also, the terms of the mortgage might give you additional time to reinstate. Most mortgages say the borrower may reinstate at any time prior to five days before the sale. Check your contract to see if you get the right to complete a reinstatement and the deadline for doing so. If not, the bank might agree to let you reinstate the loan.
Deficiency Judgment Following Foreclosure in Massachusetts
If a foreclosure sale fails to bring in enough to repay the mortgage debt, including fees and costs, the difference between the sale price and the total debt is called a “deficiency balance.” Many states allow the bank to get a judgment called a “deficiency judgment” for this sum against the borrower.
To get a deficiency judgment in Massachusetts, as noted earlier, the bank has to mail you a notice no less than 21 days before the sale. (Mass. Gen. Laws ch. 244 § 17B). It then has to file a separate lawsuit seeking a deficiency judgment within two years of the foreclosure sale. (Mass. Gen. Laws ch. 244 § 17A).
No Right to Redeem After the Sale in Massachusetts
Some states allow the foreclosed homeowner to redeem the home after a foreclosure sale by reimbursing the purchaser for the full price paid at the sale, plus fees and interest. Under Massachusetts law, though, you don’t get a redemption period after a nonjudicial foreclosure. (Mass. Gen. Laws ch. 244 § 18).
Talk to a Local Massachusetts Foreclosure Lawyer
While this article provides an overview of a typical foreclosure in Massachusetts, keep in mind that state and federal foreclosure laws are complicated, and cases can proceed differently depending on the circumstances. Also, servicers and banks sometimes make mistakes or skip steps, but most foreclosure errors go uncontested. In cases where the servicer or foreclosing bank omitted a required step, made an error, or violated state or federal foreclosure laws, you could have a defense that could force it to start the foreclosure over or you might have leverage to work out an alternative.
If you believe your rights were violated, talk to a local foreclosure attorney or legal aid office immediately. A lawyer can give you information about different ways to fight the foreclosure in court, as well as let you know about ways to avoid foreclosure. A HUD-approved housing counselor can also provide you with helpful information (at no cost) about various options for preventing a foreclosure.
