Massachusetts Foreclosure Law
In Massachusetts, there are two methods by which a mortgage may be foreclosed, first is the so-called entry and possession, a variation on the strict foreclosure scheme, and a non-judicial sale utilizing the power of sale clause in the security document.
Entry and Possession Procedures
Although it is not usually resorted to by lenders since this is only utilized as a fall back in cases of technicalities in non-judicial foreclosures, it involves foreclosing on the borrower by taking possession of the premises and await three years for the sale to finalize. This could be done through a lawsuit, peaceful entry and possession and secure the owner’s consent to entry.
In filing a lawsuit to recover possession of the property, the lender should include in the complaint the reason for said case, such as what condition or terms that were not followed or met. A writ of entry would be issued by the court that would evict the borrower from the premises. However, if the borrower manages to settle the dues on the mortgage, he could recover said property within two months. If the borrower fails to pay off the mortgage within three years, the lender’s ownership would be come final and the borrower’s redemption window would permanently be closed.
A second option would be for the lender to enter the premises under peaceful terms, provided that two witnesses would back up the entry as proper and peaceful. The third alternative for the lender is to secure the owner’s assent to recover property by having the borrower sign and record a document to the mortgage deed within thirty days from the signing. In both instance, the lender must wait three years for full title under these methods.
Non-Judicial Proceedings
A foreclosure sale under a power of sale clause is the usual procedure in the state. The power of sale foreclosure takes place out of court. In spite of the fact that the power of sale foreclosure is conducted out of court, it is nevertheless customary to file a lawsuit before attempting such a sale in order to make sure that the federal Soldier and Sailor's Relief Act does not apply to the borrower's situation.
Foreclosure Guidelines
The notice of the foreclosure must be published once a week for three weeks in a newspaper of general circulation in the town where the land is located. The first publication must be at least 21 days before sale. Notice must also be sent by registered mail to any owner whose interest was recorded as of 30 days prior to the sale. The actual date of mailing must be at least 14 days prior to the foreclosure sale.
Deficiency
If the foreclosure sale proceeds are not enough to pay off the lender, then the borrower is liable for any deficiency. However, the statutory notice of intention to foreclose must have been sent at least 21 days before the sale. Furthermore, the affidavit that the sale was complete must be on record 30 days after the sale. Otherwise, no deficiency can be obtained. The statute of limitations on deficiency judgments is two years after the date of foreclosure or two years after the loan payments were accelerated and the loan's unpaid balance was made due entirely.
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