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If you miss out on mortgage payments, the lending institution that lent you money might sell your house to collect the cash you owe. This is foreclosure.

When you took out your loan, you got in into 2 agreements with the bank.

- One agreement is the "note." The note states you promise to pay back the cash you borrowed.
- The other agreement is the mortgage. The mortgage says you understand that the bank can take your house to pay the debt if you do not pay back the cash you owe.
The bank needs to follow foreclosure laws before they can take your home. They need to inform you about the auction and reveal it in the paper before they foreclose. There are laws that give you time to find a method to capture up on your missed payments or find another way to avoid foreclosure. If the bank does not follow the guidelines, they can not foreclose. It is very important to know:

- What the bank needs to do,
- When it needs to do these things, and
- How to understand if the bank is following the guidelines.
Mortgage Holder

Mortgage Holder

The mortgage holder deserves to foreclose on your house if you do not make your payments. The mortgage holder can be a bank, a business, a trust, or an individual that owns the mortgage.

Noteholder

The "noteholder" is the business that owns the right to gather your payments.

Servicer

The business that sends you notifications and expenses is generally the "Servicer" for the mortgage holder. The mortgage holder employs a servicer to gather payments, manage escrow payments, process loan adjustments, and interact with you about the loan.

Sometimes the mortgage holder, noteholder and servicer are all the very same company. Sometimes they are 3 different business. In Massachusetts, a company that wants to foreclose should be both the mortgage holder, and either the noteholder, or a licensed agent of the noteholder.

When you signed your mortgage, you concurred to make all your payments on time. If you miss out on payments you are in "default," or you "default on your mortgage." Paragraph 22 of a lot of mortgages (or paragraph 26 for mortgages signed after 2021) is the location that states you offer the bank the right to foreclose if you default on your mortgage. Look at paragraph 22 of your mortgage to see if it says you concur the bank can foreclose if you default or miss payments.
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In Massachusetts, the bank does not need to go to court to foreclose on your house. The bank, or mortgage holder, can hold an auction to foreclose on your home. The bank announces that it is offering your house on a certain date. The bank can sell your home to the person who offers the most money.

When banks foreclose on a residential or commercial property without going to court, this is called the workout of the "power of sale" authorized by the mortgage. But to utilize the power of sale, banks need to follow all the regards to the mortgage and follow state foreclosure laws.

If you fall back on your mortgage payments, the bank can just foreclose if they offer you the right notices, tape-record the notices and publish the auction in the paper. They should:

Give you a Right to Cure Notice that says you have a variety of days to catch up on your payments. If you capture up with the overdue mortgage payments, they will not foreclose.
Give you a Right to Modify Notice. Sometimes the bank must alert you that you have a right to ask the bank to alter the method you pay back your loan. Changing the way you repay your loan is a modification. If you can request an adjustment and your earnings is low enough, the bank might have to provide you a modification.
Give you a Velocity Notice that informs you the total of your loan is due and if you do not pay it, the bank will foreclose.
Give you a Servicemembers Civil Relief Act Complaint. Banks should give this notification to everybody they are beginning to foreclose on. If you remain in active military duty, you can stop a foreclosure by addressing this problem.
Record 2 affidavits at the Registry of Deeds. One affidavit says the bank owns, or controls the note and the mortgage. The other affidavit states the bank followed the law under G.L. 244, s. 35B and offered you the Right to Modify Notice.
Publish the auction in the paper. For 3 weeks in a row, the bank should publish the date and time of the auction in the paper.
Give you a Foreclosure notification that tells you the date of the foreclosure auction.
Once the bank has actually followed all the steps after you miss your payments, they can hold an auction and sell your home to the buyer who offers the most money.

The bank will your home on the date and time in the notifications in the paper and the letter they sent to you. If the auction was delayed by proclamation the auction will happen on the date it was revealed.

If there is a foreclosure auction scheduled within the next 7 days, the Massachusetts Division of Banks might have the ability to assist you get a 60 day post ponement.

The auctioneer and an agent of the bank will pertain to your residential or commercial property. The auction does not need to occur on your residential or commercial property. It can be near your residential or commercial property.

For both of these foreclosures, the individual who runs the auction must be a licensed auctioneer. The highest bidder wins the auction. The bank is enabled to bid at the auction. The bank frequently wins the residential or commercial property.

The purchaser generally has thirty days to pay the total that they bid, and sign the paperwork. Once all the paperwork is signed, the bank indications the deed and gives it to the new owner.

If the highest bidder does not pay the full quantity within the 1 month, they lose their deposit. The second greatest bidder can take the residential or commercial property.

On the day of the auction, you may see an individual who is representing the bank action onto your residential or commercial property. They do this to make sure that if something fails with the foreclosure by auction they can still take your home a different method. This type of foreclosure is "foreclosure by entry." The bank agent does not have to come into your home. They can simply step onto your land, anywhere.

Within thirty days after the sale, the bank that sold your residential or commercial property must tape-record a copy of:

- the notice of sale, and
- an affidavit that the foreclosure sale was performed correctly.
The Registry of Deeds makes this info readily available online.

After the foreclosure, the brand-new owner should send you a notice that tells you who won the auction. The winner of the auction is the brand-new owner of your residential or commercial property.

You may not get the notice right now. It might take a few weeks.

If a bank is the brand-new owner, they will have a residential or commercial property manager. You will get a notice that tells you the name of the residential or commercial property manager. Contact the residential or commercial property supervisor if there are problems with the home.

You can also find out who the brand-new owner of your residential or commercial property is by taking a look at the deed. See the Registry of Deeds for the town where the residential or commercial property is located.

If the sale of your house did not generate sufficient to cover the total quantity you owe the bank, you still owe the bank cash. The cash you owe is a "deficiency."

The bank can sue you for the shortage. But they should have provided you the right notice before the auction. The notice ought to have stated they planned to "seek a shortage" after the sale.

If you can not manage your mortgage you might have to quit your home. But you might be able to have more control over how you provide it up and prevent foreclosure.

Or, you might be able to keep your home:

- Contact the bank and ask if you can work out a plan to keep your house.
- Get in touch with A HUD-approved housing therapy company to find out what you can do.
- Contact the Massachusetts Attorney general of the United States's Consumer Advocacy and Response Division to get more information about your rights.
- Try to get legal help.
Bankruptcy might be option for stopping a foreclosure sale. A Chapter 7 bankruptcy may just postpone foreclosure. However, if you can make continuous payments once again, a Chapter 13 personal bankruptcy can enable you approximately 5 years to repay an arrearage. Talk to a legal representative.

Foreclosures are complicated. Try to get legal aid.

You might be able to get complimentary legal aid from your regional legal aid program.

If you do not certify for legal aid, try a lawyer referral service. If your income is low enough, you might certify for their minimized fee recommendation.