Massachusetts is a non judicial (technically, “nonjudicial under power of sale in deed of trust") foreclosure state... Uhm, what the heck is that you ask? Oh, just that lenders can take your home without going through court, or any sort of judicial proceeding. Okay and?! AND, say good bye to any extra time you thought you had in your home, because clearly there will be no pending judicial process delaying your foreclosure... I don't mean to a big ole' foreclosure ogre or anything but that's reality peeps, time to embrace the “it is what it is.”
Foreclosure by sale
Otherwise know as, “foreclosure under a deed of trust.” which just so happens to let the lenders sell your precious property through a power of sale (unfair much? after all you two have been through, haha they got you! If you didn't already know, lenders have 0 remorse..). Now I'm sure you want an explanation of how this power of sale BS works. Here it goes.....
First of all, about 99.8% of mortgages contain a power of sale clause (this is the little clause that gives the lender permission to sell your property and get the “money you owe them” back). Of course, as if lenders weren't predictable enough already, at the first instance of default, they will be on you like mayo on a bologna sandwich to get their money, and they can, because of the POS clause part of the mortgage that YOU SIGNED!
Then, an attorney will act as a representative of the lender to effectuate the sale which typically occurs in the form of an auction.
Here comes that guy in that gray suit and red tie, ready to go. Can I get $100,000 what about $125,000.... $150,000... going once, going twice! SOLD.
However, lenders can't take your property just because they feel like it or because they can summon the almighty POS clause ....
They need to give you major notice first
Since this is a non-judicial issue, there are stringent notice requirements and legal documents to sign in order to use the POS foreclosure method. This just keeps it “semi-fair” for the homeowner. Massachusetts government decided to throw homeowners a bone with this one.
THE POS. NOTICE REQUIREMENTS are....
Before initiating a foreclosure the lender must record a notice of foreclosure sale in the county in which the property is located.
Notice of the foreclosure sale as described above must be served on borrower by registered or certified mail AT LEAST 14 days before the foreclosure sale date. Then, the notice must be published once a week for 3 weeks prior to the foreclosure sale. The publications must be in a newspaper in general circulation in the county in which the property to be foreclosed is located.
** Basically, lenders are required to go a bit out of their way and make publicly known that (X) property is being foreclosed. Perhaps this gives people more comfort in knowing that even if they didn't get the dreaded letter, then maybe, just maybe, they'll get the bad news in the Daily Bugle (Amazing Spider Man reference here). Lenders have to make sure that everyone and their mothers know (X) property is about to be foreclosed because that is the only way they can proceed to step 3.....
After all the notices and what not, (and you decide not to do anything about it), the property may be sold at a public auction based on the notice, time, date, and place specified . The property is sold to the highest bidder, with a private auctioneer usually conducting the sale. (I mean, isn't that how all auctions work?) I think we get the picture now....
What can you do about this?!?!
So far this segment has been about how lenders CAN and WILL take your property upon default. Not yet have we touched on a remedy. Trust me peeps, there is a remedy (and no you don't have to go on a headless chicken chase to get it) AND it's pretty good if I say so myself..
So what's this remedy?
Tick tock, tick tock, tick tock....
A LOAN MODIFICATION!!
Yes! Get this, “If you default on your mortgage, Massachusetts law requires your lender, in most cases, give you 150 days to correct the problem before foreclosing on your home. The "150-day Right to Cure Notice" applies if your mortgage is for a residential property with four or fewer units, and you live in the property as your principal residence.
During the 150 day right to cure, you can apply for a loan modification of home (X). Oftentimes, one is able to negotiate a loan modification before the lender can auction the home.....
That's not all...
If your lender has already negotiated with you, unsuccessfully, to try to resolve your problem, then a 90-day Right to Cure Notice may apply.
Here, if your first try at obtaining a loan mod failed, you have 90 days to try again!
Although Massachusetts is a predominately non-judicial foreclosure state, it doesn't mean that as a struggling homeowner, you're S.O.L. Like I previously said, you get a chunk of time to try and change your situation. All you have to do is do your homework and try to find a reputable attorney (hint hint : Amerihope Alliance Legal Services) to help you negotiate a loan modification. That way, you will be able to keep your home and have a reduced monthly payment.