Prior to Bankruptcy
Through the use of the acceleration clause located in your mortgage agreement a bank or lender may begin the foreclosure process when you miss multiple or even any mortgage payments. Many people are surprised to learn that a lender or bank may foreclosure for as little as one missed payment – although in most cases this does not occur, it takes multiple missed payments before a bank or lender chooses to foreclose. Still, it is important to understand the a Massachusetts resident may find themselves in the foreclosure process through missed payments on a mortgage.
What Happens Next? What is the Foreclosure Process in Massachusetts?
Beginning the foreclosure process in Massachusetts requires lenders or banks to follow a fairly stringent process of notification and notice of remedies available to you as the mortgagor. Failure, on the part of a bank or lender to follow the steps required to conduct a Massachusetts foreclosure may result in their ability to conduct the foreclosure being hampered. Here is a list of the documents that a bank or lender is required to provide to a mortgagor in Massachusetts:
1. Right to Cure Notice – A Massachusetts resident must receive from a bank or lender a notice which informs you of the fact that your mortgage payments are overdue. This letter must state the number of days you have to catch up on these overdue payments, and must inform you that successfully paying under the terms of the letter will stop any attempt at foreclosure.
2. Right to Modify Notice – You may receive a notice from a bank or lender informing you that you have a right to seek a loan modification. If your income is below a certain threshold, the bank or lender may be required to provide such a notification to you. If you do not receive this notification from your lender or bank, you can still make an attempt to modify your mortgage; contact our office to get some help with this process.
3. Acceleration Notice – You will receive, or should receive, a notice from the bank or lender which explains how much you must pay right now to avoid foreclosure. This document will also inform you of the intention of the bank to enter into foreclosure for your failure to pay this amount.
4. Servicemember’s Civil Relief Act Complaint – If you are an active service member, you may be able to stop the foreclosure process by answering this complaint. Contact our offices for further assistance with this matter.
5. Also note that lenders and banks must record two affidavits with the Registry of Deeds one of which describes the bank’s ownership of the promissory note and the mortgage, the second affidavit declares that a Right to Modify Notice was sent and received by you.
6. Foreclosure Notice – At the final stage of this process, you will be receiving a foreclosure notice which acts as notice of the date that a foreclosure will be conducted.
NOTE: The order of receipt of these documents or omission of some of these documents during the foreclosure process may vary as not every bank will follow these steps precisely or may make errors along the way. Errors or omissions, or even what may be purposeful failure to follow the foreclosure process could be advantageous to you and we want to know about such events as they can be very helpful in negotiating your case.
Stopping Foreclosure by Filing for Bankruptcy in Massachusetts
Through the benefit of the automatic stay which occurs when a bankruptcy petition is accepted by the Bankruptcy Court, a hold on foreclosure which occurs when a person files for bankruptcy, the foreclosure process may be held. The automatic stay, as it applies to bankruptcy, is spelled out in 11 USC section 362(a)(3).
Remember that timing is very important at this point. Basically, failing to file for bankruptcy (where bankruptcy is the best option under your specific circumstances) in the face of a pending foreclosure may result in the bank achieving foreclosure. Contact our office to evaluate your financial circumstances and for a determination of whether bankruptcy may be a plausible option.
Another consideration, as mentioned above, is the loan modification. Sometimes, it is possible to stall the bank while you buy time for yourself to attend to improving your financial situation by modifying your mortgage to a lower monthly payment. The loan modification needs careful attention, however, as sometimes a bank or lender representative may say one thing and do another.
DISCLAIMER:
The information provided in the pages and posts of this website are for general informational purposes only. The information presented on this site is not legal advice, and no attorney-client relationship is formed by the use of this site.
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