Foreclosure Procedures in Massachusetts
A foreclosure may occur when a homeowner is unable to meet the financial obligations established in his mortgage contract. When this happens, the lending agent has the authority to reclaim the property and sell it at auction to the highest bidder. The foreclosure process in Massachusetts generally takes 75 to 90 days, unless the homeowner is able to fight the proceedings.
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Title Ownership
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Massachusetts subscribes to the title theory of property ownership. This theory states that the property remains under the ownership of the lending agent until the mortgage contract has been fulfilled in its entirety. The trust deed transfers ownership from the seller to the lender as a part of the mortgage process.
Foreclosure by Possession
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Massachusetts offers several ways for the lending agent to recover possession of property that has defaulted. The lender may file a lawsuit seeking a court order allowing the foreclosure to take place. In this case, the court will generally establish a deadline for the payment of any delinquent balance. If the deadline is not met, then foreclosure proceedings may begin. The lending agent may also obtain the property by entering the premises legally and peaceable, or by the expressed consent of the borrower.
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Power-of-Sale Foreclosure
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The lender may also foreclose through a power-of-sale clause. This clause, when present in the mortgage contract, allows the lending agent to foreclose, without a court order or other legal remedy, as soon as the loan has defaulted. In the case of a power of sale, the lending agent generally appoints a trustee to ensure that the lending agent's interests are represented throughout this process. The power of sale usually specifies the terms of the foreclosure proceedings. If this information is not present, then Massachusetts' regulations take effect. The lending agent must file a notice of sale in the county in which the house is located. A copy of this notice must also be sent to the borrower, via registered mail, at least 14 days prior to the sale.
Right of Redemption
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In Massachusetts, a borrower may have the right to reclaim his property after it has been sold. This may be accomplished by paying the full balance of the loan, plus any costs associated with the foreclosure. The borrower has three years from the sale to redeem the property, unless the foreclosure was initiated through the power-of-sale clause. In this case, no right of redemption exists.
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