If you miss out on mortgage payments, the lending institution that loaned you money may offer your house to collect the cash you owe. This is foreclosure.

When you secured your loan, you got in into 2 agreements with the bank.

- One contract is the "note." The note states you guarantee to pay back the cash you borrowed.

- The other agreement is the mortgage. The mortgage says you comprehend that the bank can take your house 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 must inform you about the auction and announce it in the paper before they foreclose. There are laws that offer you time to find a way to capture up on your missed payments or discover another method to prevent foreclosure. If the bank does not follow the rules, they can not foreclose. It is important to understand:

- What the bank needs to do,

- When it has to do these things, and

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


Mortgage Holder

Mortgage Holder

The mortgage holder has the right to foreclose on your home 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 company that owns the right to gather your payments.

Servicer

The company that sends you notices and bills is generally the "Servicer" for the mortgage holder. The mortgage holder employs a servicer to collect payments, manage escrow payments, procedure loan adjustments, and communicate with you about the loan.

Sometimes the mortgage holder, noteholder and servicer are all the very same company. Sometimes they are 3 various companies. In Massachusetts, a business that wishes to foreclose need to be both the mortgage holder, and either the noteholder, or a licensed agent of the noteholder.

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

In Massachusetts, the bank does not need to go to court to foreclose on your home. The bank, or mortgage holder, can hold an auction to foreclose on your home. The bank reveals that it is offering your home on a certain date. The bank can sell your home to the person who provides the most cash.

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 need to 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 ideal notifications, record the notices and publish the auction in the paper. They should:

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

Give you a Right to Modify Notice. Sometimes the bank needs to notify you that you have a right to ask the bank to alter the way you pay back your loan. Changing the method you repay your loan is an adjustment. If you deserve to ask for an adjustment and your earnings is low enough, the bank might need to offer you a modification.

Give you an Acceleration Notice that informs you the full quantity 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 need to offer this notification to everybody they are starting to foreclose on. If you remain in active military task, you can stop a foreclosure by addressing this grievance.

Record 2 affidavits at the Registry of Deeds. One affidavit states the bank owns, or manages the note and the mortgage. The other affidavit states the bank followed the law under G.L. 244, s. 35B and gave 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 notice that informs 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 money.

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 delayed by proclamation the auction will occur on the date it was announced.

If there is a foreclosure auction arranged within the next 7 days, the Massachusetts Division of Banks might be able to assist you get a 60 day post ponement.

The auctioneer and an agent of the bank will come to your residential or commercial property. The auction does not need to take place 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 needs to be a licensed auctioneer. The greatest bidder wins the auction. The bank is allowed to bid at the auction. The bank often wins the residential or commercial property.

The buyer normally has thirty days to pay the total that they bid, and sign the documentation. Once all the paperwork is signed, the bank indications the deed and provides it to the new owner.

If the highest bidder does not pay the complete quantity within the 30 days, they lose their deposit. The second highest 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 goes incorrect with the foreclosure by auction they can still take your home a various method. This kind of foreclosure is "foreclosure by entry." The bank agent does not have to enter your home. They can simply step onto your land, anywhere.

Within 30 days after the sale, the bank that sold your residential or commercial property must record a copy of:

- the notification of sale, and

- an affidavit that the foreclosure sale was performed correctly.


The Registry of Deeds makes this information available online.

After the foreclosure, the new owner needs to 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 might not get the notice right now. It could take a few weeks.

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

You can also learn who the 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 lies.

If the sale of your house did not generate sufficient to cover the total quantity you owe the bank, you still owe the bank cash. The cash you owe is a "deficiency."

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

If you can not manage your mortgage you might have to give up your home. But you might be able to have more control over how you give it up and prevent foreclosure.

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

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

- Get in touch with A HUD-approved housing therapy firm to learn what you can do.

- Contact the Massachusetts Attorney general of the United States's Consumer Advocacy and Response Division to learn more about your rights.

- Try to get legal help.


Bankruptcy might be option for stopping a foreclosure sale. A Chapter 7 personal bankruptcy may only postpone foreclosure. However, if you can make ongoing payments once again, a Chapter 13 personal bankruptcy can enable you approximately 5 years to repay a balance due. Speak with a legal representative.

Foreclosures are made complex. Try to get legal aid.

You might be able to secure free legal help from your regional legal aid program.

If you do not receive legal help, attempt a lawyer recommendation service. If your earnings is low enough, you may certify for their decreased cost recommendation.