Foreclosure Law in Massachusetts

In Northborough, Massachusetts, foreclosure is a process through which a lender that issued a mortgage loan retakes possession of the property that was bought with the mortgage in the event that the borrower has defaulted on his or her payments.

When consumers have to deal with foreclosure, it almost always involves a home. The bank will usually take possession of the house, and then sell it at auction, to try to encompass the balance of the mortgage. Banks normally want sell the property quickly, for as much money as possible.

In every U.S. state, including Massachusetts, a borrower has a right to a judicial sale of their foreclosed property. A judicial sale is just an auction supervised by a court. The purpose of this is to make sure that the lender takes reasonable steps to sell the home for the highest possible price, and to ensure that the homeowner has an opportunity to bid on the house, if he or she is able. It is in everybody's interest for the bank to get the highest price possible for the house, even the borrower's. If the house fetches a higher price than what's left on the mortgage, the buyer can keep what's leftover. On the other hand, if it fetches less, the buyer might have to pay the deficiency.

In a large number of states, but not all of them, mortgages are a type of loan recognized as a "non-recourse loan." While the regulations governing these loans are complex, it most essentially means that, once the house is sold, and the sale price doesn't cover what the borrower owes, the lender can't go after the borrower for the remainder. They simply have to take the loss.

How to Possibly Avoid Foreclosure in Northborough, Massachusetts

First and foremost, you need to communicate with your lender, and not dismiss the issue. Ignoring a problem with your mortgage will not make it go away, and can only make things worse. You should be straightforward with your lender, and stay in touch with them as much as possible.

You must keep in mind that banks are in the business of lending funds, not flipping property: the bank doesn't really want your house. To that end, they'll occasionally go to great lengths to accommodate your financial situation, whatever it may be. For banks, foreclosure is a last resort.

Because banks don't specifically enjoy foreclosing, they will probably be willing to work out an alternative payment plan with you, if necessary. Nonetheless, if you think that this might be needed in the near future, you should contact your lender immediately. The sooner they know about it, the more options you have.

Some buyers in Massachusetts, when none of the above options have worked, resort to a "short sale." This contains selling a house which is about to be foreclosed, normally for less than its market value. If the house sells for less than what's left on the mortgage, the homeowner is relieved of the duty to pay the balance. If you have decided that you have no hope of making your mortgage payments, and foreclosure seems inevitable anyway, this might be the way to go.

Can a Northborough, Massachusetts real estate attorney help?

If you are worried that your Northborough, Massachusetts house is going to be foreclosed, and want to try and stop this, a seasoned real estate lawyer can help.