Requirements Under Massachusetts Law Before a Bank Can Foreclose
Massachusetts is what is called a non-judicial foreclosure state. This means that to foreclose, the bank does not have to take you to court. In some states, the bank has to file a formal lawsuit against you before it can foreclose. Consumer advocates have proposed that this be required in Massachusetts, too, but the banking lobby has vehemently opposed it because they want to be able to foreclose more quickly, without oversight by judges.
[pullquote align=”left or right”]If a homeowner suspects that the bank has not complied with these requirements, he or she should consider filing a lawsuit against the bank.[/pullquote]Just because the bank doesn’t have to take you to court, however, it doesn’t mean that there aren’t a number of procedural requirements before the bank can foreclose.
These major requirements, along with citations to the laws or other legal source of the requirements, are listed below.
The homeowners must be in default. That is, they must have failed to make a payment. This is the source of the right to foreclose. This is in the mortgage and promissory note.
The mortgage must contain what is called the “power of sale.” This is a section of the mortgage giving the bank permission to foreclose if the loan is in default. This is usually in the mortgage.
The bank must then send a notice of the “right to cure.” This gives the homeowners the right to catch up, or cure, the mortgage, within the next 150 days (approximately five months). The bank is not allowed to foreclose during this time. (Chapter 244, Section 35A of the Massachusetts General Laws)
The bank then has to give the homeowners the opportunity to obtain a loan modification. The bank must send a loan modification application, and the homeowner must respond by filling it out and sending it back with supporting financial documentation. If the homeowners does not send back an application, the 150-day right to cure is reduced to 90 days. (Chapter 244, Section 35 of the Massachusetts General Laws)
After the 150 day (or 90 day) period, the bank then has to request a declaration from the Land Court (or sometimes the Superior Court) that the homeowners are not in the military, under a federal law called the Servicemembers Civil Relief Act. This is a special law that protects people in the military from being foreclosed on while they are serving our country. This takes approximately one to three months. The homeowners are served with a document called an Order of Notice, telling them that they have the right to contest the foreclosure if he or she is in the military. This is when they should be aware that the sale date is approaching.
Before scheduling a sale, however, the bank has to file two affidavits in the county registry of deeds. The first affidavit has to swear that the bank holds the homeowners’ note. (Required under Chapter 244, Section 35C of the Massachusetts General Laws) The second affidavit has to swear that the bank complied with the requirement to offer to review for a loan modification. (Chapter 244, Section 35B)
The bank may then publish and send notice of the sale. The bank has to publish a notice of sale for three consecutive weeks before the foreclosure sale in a local newspaper. The bank also has to send the homeowners notice of the foreclosure sale at least two weeks before the sale (or at least three weeks, in some situations). (Chapter 244, Section 14)
Additionally, all the assignments of the mortgage must be recorded in the county registry of deeds on or before the date that the foreclosure notice is published. (Chapter 244, Section 14)
Overall, the time it takes from the first missed payment to foreclosure is approximately a year. This can sometimes be longer or shorter. If a homeowner suspects that the bank has not complied with these requirements, he or she should consider filing a lawsuit against the bank.
Why are these requirements important? Because if the bank fails to comply with any of these, the entire foreclosure process may be invalid and the bank may have to start the process over again.