Foreclosure process in Massachusetts: notices and timeline

Judicial or non-judicial?

The power-of-sale route needs no lawsuit. A mortgagee “may, upon breach of condition and without action,” carry out the power of sale, as long as the notice rules in § 14 are followed. The law also allows foreclosure “by entry” or by court action (§ 1). If a mortgagee takes possession peaceably and keeps it for three years from recording a memorandum or certificate, the right of redemption is gone (§ 1). Section 11 adds that, after a conditional judgment on a mortgage with a power of sale, the court orders the property sold under that power.

Timeline step by step

The 90-day cure and the 150-day review

The § 35A notice must state the default, the cure date (at least 90 days after service), the name and address of the person to pay, and that the homeowner may sell the property, redeem before the sale, or be evicted after it. It must also say the homeowner may be eligible for help from the Massachusetts Housing Finance Agency and the Division of Banks, and open with: “This is an important notice concerning your right to live in your home. Have it translated at once.” A copy goes to the Commissioner of Banks.

“Certain mortgage loans” under § 35B are owner-occupied loans with features such as interest-only payments, an introductory rate of three years or less, a high loan-to-value ratio with a debt ratio over 38 percent, or no full documentation of income. For these loans the lender must make a good faith effort before publishing a notice of sale, and that review can run up to 150 days. A borrower who does not respond to the notice within 30 days is treated as having forfeited that right and falls back to the 90-day cure. The right to a modification review applies once in any 3-year period. Loans financed by MassHousing are not “certain mortgage loans.”

Lenders must also certify compliance by recording an affidavit before publishing the notice of sale (§ 35B(f)), and a lender may not publish a notice when it knows or should know it is not the holder of the note or the holder’s agent (§ 35C(b)).

Right of redemption

The owner may redeem by paying the debt before the sale. After a sale under a power of sale, redemption ends: § 18 allows redemption “unless the land has been sold pursuant to a power of sale contained in the mortgage deed.” After a foreclosure by possession, redemption is cut off after three years of continued possession (§ 1).

Deficiency judgments

The lender can sue for the balance after the sale, with conditions. It must have mailed a written notice of its intention to foreclose, with a warning of liability for the deficiency, by registered mail at least 21 days before the sale, and must sign an affidavit of mailing within 30 days after the sale (§ 17B). The action must start within two years after the sale (§ 17A). Neither rule can be waived in advance (§ 17C).

Servicemembers

For a mortgage taken out before military service, a foreclosure is not valid during service or within one year afterward unless a court order was granted first, or the sale follows a written agreement under 50 U.S.C. § 3918 (50 U.S.C. § 3953(c)). Knowingly violating that rule is a misdemeanor (§ 3953(d)). The CFPB describes the same protection. Servicemembers should ask a military legal assistance office to check their rights.

Help for homeowners in default

• Federal rules: a complete loss mitigation application received more than 37 days before the sale generally stops the servicer from holding the sale until it has been resolved (12 CFR 1024.41(g); CFPB).
• HUD-approved counselors: HUD funds free or low-cost counseling. Call (800) 569-4287, TTY (800) 877-8339 (HUD).
• State agencies: the cure notice must point you to the Massachusetts Housing Finance Agency and the Division of Banks (§ 35A(c)(6)). This article could not read their foreclosure pages directly, so use the phone numbers in your notice.

If you want to sell instead, the notice tells you that you may sell before the foreclosure sale and use the proceeds to pay off the mortgage. See home buying steps, capital gains on a home sale and Boston.