Massachusetts Foreclosure Process
When the borrower of a mortgage loan is unable to make the payments mandated by the mortgage contract, the lender has the right to reclaim the property and sell it to the highest bidder. This is referred to as a foreclosure. In Massachusetts the foreclosure process typically takes 75 to 90 days to complete.
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Title Theory
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Massachusetts is a title theory state. This means that its mortgage laws are based on the idea that the lender still owns the property until the terms of the mortgage contract have been fulfilled. The trust deed transfers ownership to the lender for the duration of the contract.
Foreclosure by Possession
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Massachusetts allows three ways for a lending agent to gain possession of a home once the loan is in default. He can request a court order to foreclose on the property, the borrower can give the deed to the lending agent or the agent can enter the property and maintain possession for at least three years.
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Nonjudicial Foreclosure
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Massachusetts allows the lending agent to bypass the legal process entirely by putting a power of sale clause in the contract. This clause allows the lender to foreclose on the property if the terms of the contract are not met. The lender will normally appoint a representative, referred to as a trustee, to enforce the clause if necessary.
Power of Sale Guidelines
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The power of sale clause generally outlines the procedures necessary to carry out the foreclosure. In the event that this information is missing, Massachusetts has certain minimum requirements that must be met. The lender has to file a notice of sale with the county clerk's office. It must send the same notice, by registered mail, to the borrower at least 14 days before the auction is held. The notice must also be published in a local newspaper at least once a week for three successive weeks. The first advertisement must appear at least 21 days before the auction takes place. The auction must occur on the date specified in the notice and the property must be awarded to the highest bidder.
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