How does foreclosure work under Massachusetts law, and how long will it take the bank to get my house?  (Posted by big107 on the Forum.)

Editor's Response:

Here is a description of a fairly typical foreclosure under Massachusetts law: After the customer (or mortgagor) misses a mortgage payment, the bank (or mortgagee) will send a Late Notice. If additional payments are missed, the bank will attempt to contact the customer and work the situation out. If no arrangement is reached, the bank will take the following steps:

1. Issue a demand for payment in full under the acceleration clause of the note. Under the acceleration clause, if the mortgagor fails to make monthly payments as promised, the bank can demand full payment of the amount still due under the note, plus any accrued interest, late charges, and legal fees. If the customer has not already done so, she should certainly contact an attorney at this stage, because the bank will become increasingly less flexible in considering payment options. The further along you get in this process, the more difficult it will be to hold on to your home.

2. The formal Legal Foreclosure Process starts when the bank sends a Notice of Intent to Foreclose by sheriff or by certified mail and then starts an action in the court system to foreclose. At this point, certain notices that are required by law will be published in local papers. If no payment or settlement arrangements are made with the bank, and the notice and waiting period expires, the process goes to court.

3. After a hearing, if there are no defenses, the court will issue an order allowing the bank to foreclose. A notice of foreclosure sale will be published in local papers. If the customer and the bank are still unable to reach a payment solution, the property will be sold at auction to the highest bidder.

Keep in mind, however, that this process takes time. From the date of the first missed payment to the date of the sale, the process can take six months or more. In addition, the foreclosure sale merely transfers ownership of the house from the customer to the highest bidder at the auction. Massachusetts law then considers the old owner of the property a tenant, and the new owner must follow the time consuming procedure for eviction outlined by Massachusetts law.

For more information or to post a question, visit our Consumer Law Discussion Forum.