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Selling A Home Prior To Foreclosure
Your Lender and/or Mortgage Servicer may neglect to inform you of the option to sell your home when you are in default, and to avoid foreclosure. You should NEVER lose your home to foreclosure if you maintain equity over and beyond the outstanding principal balance of your mortgage loan. In these situations, even within days of the foreclosure auction, we can generally get a postponement or cancellation of the pending foreclosure.
The Length Of The Foreclosure Process
It is very difficult to calculate the length of the foreclosure process. Simply, it involves several entities and agents, including but not limited to: the true owner/investor of your loan, the mortgage servicer of your loan, and the local foreclosing attorneys hired to carry out the foreclosures. Each of them tends to operate at varying speeds. Additionally, some mortgage loans involve certain procedural or contractual defects that must be reviewed, assessed and corrected prior to foreclosure. Typically, the first official notice that your mortgage holder is moving to foreclosure is the Service Members Civil Relief Act Complaint that is filed in the Land Court. That complaint is necessary to assess the military status of household members prior to initiating foreclosure proceedings. Unknown to many homeowners facing foreclosure, you maintain legal rights to possession of your home even after the auction sale. That’s because legal possession and valid title must be established through a legal eviction proceeding, at which claims can be raised regarding the validity of the foreclosure and/or the foreclosing entities right to exercise the power to sell your home at foreclosure.
About The Right-To-Cure Notice
Massachusetts residential mortgagors (borrowers) are entitled by statute to a 90-day “Right to Cure” letter. The letter explains your rights as mortgagor to cure any default of your mortgage within a 90-day period prior to the Mortgagee (lender) accelerating your loan and moving toward foreclosure. Your mortgage itself typically provides an additional notice, with particular requirements that your lender must notify you of and strictly comply with in order to validly proceed with a foreclosure. The mortgagee or more typically the mortgage servicer of your loan will usually send one notice that covers the statute and the clause in your mortgage contract related to curing your default. Although, at times you will receive two separate notices, which can be confusing as the two notices provide conflicting periods for curing your default. Understand, you have the minimum 90-day cure period regardless of the conflicting notices. Your lender is also obligated to make good faith efforts to negotiate a commercially reasonable alternative to foreclosure and provide you notice of specific information regarding your legal rights, which should be provided for in said right to cure letter/notice. Your mortgagee/lender must also record an affidavit in the local land registry attesting to its compliance with the standards set forth in this paragraph prior to foreclosure.
All About The “Acceleration” Of A Loan
If you fail to cure your default within the statutory 90-day period, your lender has the option of accelerating the entirety of your loan, meaning it is calling the full balance of your mortgage loan due. Once your lender has accelerated your loan, the entire balance must be paid off to avoid foreclosure if other alternatives such a loan modification have been exhausted, although many mortgage contracts provide for the right to reinstate your mortgage loan by paying all arrears (outstanding payments) and fees prior to foreclosure. This would allow you to get back on track with your monthly payments.
Foreclosing A Home While The Owner Applies For A Loan Modification
Once your loan has been placed “in process” for modification review and approval, your lender/mortgage servicer cannot simultaneously move for foreclosure. This is called “dual tracking” and it is illegal. Often the entity you are dealing with in obtaining a modification will frustrate the process by opening and closing your file if your submissions are not “timely”, make exhausting requests for documents (often docs you have sent multiple times), which need to be re-submitted each time the agent “closes” your file and generally causing extreme anxiety and headaches. All of this lead to homeowners giving up in their efforts. You must understand that you are not “in process” until all necessary documents are received, providing the lender/mortgage servicer with the ability to continue toward foreclosure and supposedly avoid the “dual tracking” legal standard.
What Happens After The Home Is Foreclosed
After foreclosure, you continue to maintain valid legal possession of your home up and until the foreclosing entity or third-party purchaser at the foreclosure auction obtains a judgment and execution from a Massachusetts Court, which provides them superior rights to possession. You must maintain possession of your home following foreclosure to maintain such rights. Do not abandon your home without consulting an attorney. You will first receive an eviction notice, typically a 72-hour notice to quit/vacate. Do not be fooled by this notice as you do not have to vacate within this time frame. Subsequent to this notice, you will receive a Summons and Court Complaint, likely delivered by a constable/sheriff’s service, notifying you of important dates by which you must Answer the Complaint and appear in Court. You do not want to proceed on your own once you have been served and do not have much time to obtain legal assistance. The Post-Foreclosure eviction process can be completed in expeditious fashion if you are not represented by legal counsel but if you retain a competent foreclosure attorney, the time in your home can be extended and the options to other avenues of relief can become a reality.
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