Clients often stress that they don’t know if, or when, they might be foreclosed on. Thankfully, the foreclosure process in Massachusetts has many steps, and you must receive several notices throughout this process.
Below is a generalized timeline of a residential foreclosure in Massachusetts.
The Foreclosure Timeline, Step by Step
Day 1
You missed your first payment. Really, this is Day 15 as your mortgage likely has a grace period stating that there’s no penalty for making a late payment as long as it’s made by the 15th of the month. After the missed payment, you may start getting collection calls and letters from the bank.
Day 30
After the loan falls more than 30 days behind, the loan will be considered in default. Once the loan is in default, the bank can begin foreclosure efforts. Of course, while this is something that the bank can do, the aggressiveness that each bank takes in its foreclosure efforts will vary. Foreclosure can sometimes be brought very quickly, but that is not always the case.
Notice of Right to Cure
At some point after default, the bank must send you a notice stating specifically how much you are behind by. The notice will give you a specific date to catch up on these payments. If you don’t bring the payments current by that date, the loan will be accelerated (meaning that the full loan balance will be due, and individual monthly payments may no longer be accepted) and the bank may then schedule a foreclosure sale.
The amount of time you have under the Notice of Right to Cure will depend on your loan terms and whether you apply for a loan modification. Massachusetts foreclosure laws have identified certain loan features to be more problematic than others. Generally speaking, if you put only a small amount of money down on the mortgage, or if your loan had a low introductory interest rate, then the bank must also send you paperwork stating that you have a right to request a loan modification. If you submit this request for a loan modification in a timely manner, then you will have 150 days to catch up. Otherwise, you will only have 90 days, which is the amount of time that all other loans are given.
Servicemembers Civil Relief Act
After a loan is accelerated, the bank will usually file a request for a judgment in the Land Court under the Servicemembers Civil Relief Act. This is a protection for those in the military to ensure that no active duty military members are foreclosed on. If you are active in the military, you are entitled to file a response within 20 days. If you are not active in the military, you need not do anything. This step is not technically required under Massachusetts foreclosure law, but it is customarily done in Massachusetts before a foreclosure occurs.
Notice of Sale Date
Finally, after a loan is accelerated and a judgment is issued by the Land Court, the bank will schedule a sale date of the property. In order to do so, it must publish notice of the sale in the newspaper for three consecutive weeks and must send you notice of the sale date at least 14 days ahead of time.
Foreclosure Auction
On the day and time of the auction, the auctioneer and any prospective purchasers will arrive at the property. The auction typically takes place on the street or sidewalk in front of the property, and purchasers are not allowed into the home. It will be sold to the highest bidder at auction.
Eviction
After the foreclosure sale, you are not immediately required to leave. Instead, the new owner must bring an action in the housing court in order to lawfully evict you.
Foreclosure Isn’t Always the End Point
As you can see, there are many steps that the bank must do in order to foreclose. These are only generalized steps, though, and there may be additional steps required on your particular loan. For example, if you have an FHA loan, an attempt must be made to personally meet with you to discuss potential loan modification options.
If your bank is threatening foreclosure, contact Brine Consumer Law today for a free consultation.