Massachusetts Foreclosure Laws

Foreclosure laws in Massachusetts can follow either judicial or non-judicial proceedings; however, the right of redemption is not applicable. Mortgage is the Instrument of Security. Typical foreclosure timeline is 3 to 4 months.

Judicial And Non-judicial Foreclosure

Both judicial and out-of-court foreclosures are available in Massachusetts. If the borrower defaults on his or her payments to the lender, the lender can foreclose the distressed property.

Non-judicial foreclosure applies when the mortgage agreement contains the Power of Sale clause. This provision, which is signed by the borrower, authorizes the sale of property through a foreclosure sale in order to pay off the balance on a mortgage loan in the event that the borrower defaults on payments.

Judicial foreclosure requires the lender to file a lis pendens or a formal complaint, which is a legal notice indicating that there is an impending foreclosure on the distressed property, in court. If the court favors the lender, a Writ of Possession will be issued by to evict former owner or borrower of the property. The judicial process is done through what is commonly known as ‘Foreclosure by Possession’ wherein, the lender files the appropriate documents in court in order to obtain a court order. This court order allows the lender to legally reclaim possession of the distressed property until the borrower or homeowner pays the defaulted amount owed.

Foreclosure laws in Massachusetts does not support right of redemption once the foreclosure sale has taken place and a winning bidder has been established. On the other hand, a deficiency judgment may not be obtained. By definition, deficiency judgment is sought if the property in foreclosure is sold for less than the amount of the mortgage loan. However, if the lender wants to claim for deficiency, a separate lawsuit should be filed.

The foreclosure sale, which is similar to that of a public auction, is conducted by a licensed auctioneer and held at the location of the property undergoing foreclosure. The highest bidder wins and acquires the property. Right after the auction, the winning bidder should provide a deposit and pay the remaining balance within 30 days.

Notice Of Sale

The Notice of Sale should have the following information: date, time, and location of public auction, borrower’s name, date the mortgage was entered, and terms of the auction. Before the public auction takes places, the Notice of Sale should be published once a week in a local newspaper for 3 consecutive weeks. The Notice should also be delivered to the borrower or homeowner at least 14 days prior to the foreclosure sale.