Foreclosure Law in Massachusetts

In Sterling, Massachusetts, foreclosure is a process through which a lender that issued a mortgage loan retakes possession of the property that was purchased 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 normally take possession of the house, and then sell it at auction, to try to cover the balance of the mortgage. Banks typically 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 simply an auction overseen 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 identified as a "non-recourse loan." While the regulations governing these loans are complex, it most basically 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 Sterling, Massachusetts

Communication between you and your lender is perhaps the most important way to avoid foreclosure. Ignoring the issue is guaranteed to be counterproductive. Honesty is the best policy when it comes to dealing with lenders.

Throughout all this, you should remember one thing: the bank doesn't really want your house. After all, banks aren't real estate speculators, they're primarily money lenders. They stand to make a great deal of money if you are able to make your mortgage payments until it's paid off. They're likely to make much less if they're forced to sell your house.

It's possible that your lender is willing to negotiate a plan that results in temporarily-lower payments on your mortgage, especially if this means that they will be able to get some payments, instead of none at all.

As a last resort, some borrowers consider a "short sale." In a short sale, the homeowner sells the house to the highest bidder, and uses the proceeds to pay off the remaining debt. If there is any extra from the sale, it goes to the borrower. If the sale price is worth less than what's left of the mortgage in Massachusetts, the remaining debt is excused.

Can a Sterling, Massachusetts real estate attorney help?

If you live in Sterling, Massachusetts and believe that your house is in danger of being foreclosed, you may have more options and protections than you think. You may not know what all of them are, but an efficient real estate lawyer probably will.