If you miss out on mortgage payments, the loan provider that lent you cash might offer your home to gather the cash you owe. This is foreclosure.

When you took out your loan, you entered into 2 agreements with the bank.

- One contract is the "note." The note says you promise to pay back the money you obtained.

- The other agreement is the mortgage. The mortgage states you comprehend that the bank can take your home to pay the financial obligation if you do not repay the cash you owe.


The bank should follow foreclosure laws before they can take your home. They need to tell you about the auction and reveal it in the paper before they foreclose. There are laws that provide you time to discover a method to capture up on your missed payments or discover another method to prevent foreclosure. If the bank does not follow the guidelines, they can not foreclose. It is very important to know:

- What the bank needs to do,

- When it needs to do these things, and

- How to understand if the bank is following the rules.


Mortgage Holder

Mortgage Holder

The mortgage holder deserves to foreclose on your house if you do not make your payments. The mortgage holder can be a bank, a business, a trust, or an individual that owns the mortgage.

Noteholder

The "noteholder" is the business that owns the right to gather your payments.

Servicer

The company that sends you notices and costs is generally the "Servicer" for the mortgage holder. The mortgage holder hires a servicer to collect payments, handle escrow payments, process loan adjustments, and communicate with you about the loan.

Sometimes the mortgage holder, noteholder and servicer are all the same business. Sometimes they are three various business. In Massachusetts, a business that desires to foreclose should be both the mortgage holder, and either the noteholder, or an authorized agent of the noteholder.

When you signed your mortgage, you concurred to make all your payments on time. If you miss payments you remain in "default," or you "default on your mortgage." Paragraph 22 of many mortgages (or paragraph 26 for mortgages signed after 2021) is the place that says you provide the bank the right to foreclose if you default on your mortgage. Look at paragraph 22 of your mortgage to see if it states you agree the bank can foreclose if you default or miss payments.

In Massachusetts, the bank does not need to go to court to foreclose on your house. The bank, or mortgage holder, can hold an auction to foreclose on your home. The bank announces that it is offering your house on a specific date. The bank can sell your home to the person who offers the most money.

When banks foreclose on a residential or commercial property without litigating, this is called the workout of the "power of sale" licensed by the mortgage. But to utilize the power of sale, banks must follow all the terms of the mortgage and obey state foreclosure laws.

If you fall back on your mortgage payments, the bank can just foreclose if they provide you the right notifications, tape the notifications and publish the auction in the newspaper. They must:

Give you a Right to Cure Notice that says you have a number of days to catch up on your payments. If you catch up with the overdue mortgage payments, they will not foreclose.

Give you a Right to Modify Notice. Sometimes the bank should alert you that you have a right to ask the bank to alter the method you pay back your loan. Changing the method you pay back your loan is an adjustment. If you can request a modification and your earnings is low enough, the bank might have to give you a modification.

Give you an Acceleration Notice that informs you the total of your loan is due and if you do not pay it, the bank will foreclose.

Give you a Servicemembers Civil Relief Act Complaint. Banks should offer this notice to everybody they are starting to foreclose on. If you are in active military duty, you can stop a foreclosure by addressing this problem.

Record 2 affidavits at the Registry of Deeds. One affidavit states the bank owns, or controls the note and the mortgage. The other affidavit says the bank followed the law under G.L. 244, s. 35B and provided you the Right to Modify Notice.

Publish the auction in the paper. For 3 weeks in a row, the bank should release the date and time of the auction in the newspaper.

Give you a Foreclosure notification that tells you the date of the foreclosure auction.

Once the bank has followed all the actions after you miss your payments, they can hold an auction and offer your home to the purchaser who uses the most cash.

The bank will auction your home on the date and time in the notices in the paper and the letter they sent to you. If the auction was held off by proclamation the auction will occur on the date it was revealed.

If there is a foreclosure auction set up within the next 7 days, the Massachusetts Division of Banks may have the ability to assist you get a 60 day post ponement.

The auctioneer and an agent of the bank will concern your residential or commercial property. The auction does not have to occur on your residential or commercial property. It can be near your residential or commercial property.

For both of these foreclosures, the individual who runs the auction should be a licensed auctioneer. The highest bidder wins the auction. The bank is allowed to bid at the auction. The bank often wins the residential or commercial property.

The buyer typically has thirty days to pay the full amount that they bid, and sign the documents. Once all the paperwork is signed, the bank signs the deed and gives it to the new owner.

If the highest bidder does not pay the complete quantity within the thirty days, they lose their deposit. The 2nd greatest bidder can take the residential or commercial property.

On the day of the auction, you may see a person who is representing the bank action onto your residential or commercial property. They do this to ensure that if something fails with the foreclosure by auction they can still take your home a various way. This kind of foreclosure is "foreclosure by entry." The bank agent does not have to enter into your home. They can just step onto your land, anywhere.

Within one month after the sale, the bank that offered your residential or commercial property needs to tape-record a copy of:

- the notice of sale, and

- an affidavit that the foreclosure sale was performed correctly.


The Registry of Deeds makes this details readily available online.

After the foreclosure, the brand-new owner must send you a notification that informs you who won the auction. The winner of the auction is the brand-new owner of your residential or commercial property.

You may not get the notice right away. It might take a couple of weeks.

If a bank is the brand-new owner, they will have a residential or commercial property supervisor. You will get a notification that tells you the name of the residential or commercial property manager. Contact the residential or commercial property supervisor if there are problems with the house.

You can also discover who the brand-new owner of your residential or commercial property is by taking a look at the deed. See the Registry of Deeds for the town where the residential or commercial property is located.

If the sale of your home did not bring in sufficient to cover the total amount you owe the bank, you still owe the bank money. The money you owe is a "shortage."

The bank can sue you for the shortage. But they should have given you the correct notice before the auction. The notice must have said they prepared to "seek a deficiency" after the sale.

If you can not manage your mortgage you may have to quit your home. But you may be able to have more control over how you provide it up and avoid foreclosure.

Or, you might have the ability to keep your home:

- Contact the bank and ask if you can exercise a plan to keep your house.

- Connect with A HUD-approved housing counseling agency to discover what you can do.

- Contact the Massachusetts Chief law officer's Consumer Advocacy and Response Division to get more information about your rights.

- Try to get legal help.


Bankruptcy might be choice for stopping a foreclosure sale. A Chapter 7 insolvency may just delay foreclosure. However, if you can make continuous payments once again, a Chapter 13 bankruptcy can permit you up to 5 years to repay a balance due. Talk with a lawyer.

Foreclosures are complicated. Try to get legal assistance.

You may be able to secure free legal aid from your local legal aid program.

If you do not certify for legal aid, attempt a lawyer referral service. If your earnings is low enough, you might get approved for their lowered cost recommendation.