The law in Massachusetts has provided for the prevention of foreclosure which seeks to inhibit unlawful and unnecessary foreclosures from taking place. The Act preventing unnecessary and unlawful foreclosures was enacted on 2nd August 2012. This Act came with additional protection for homeowners and made additional steps that lenders must make before foreclosing on delinquent homeowners as we shall see in the following headlines:
Lenders are to Act in Good Faith and assist homeowners Avoid Foreclosure
The law prompts the lenders to first avail borrowers with other means of repaying their mortgage debts before they can carry out a foreclosure. Actually the government does not have to intervene for this to happen because a lender will normally modify mortgage terms if they find it less costly than a foreclosure. However, making it a law is very in order because some lenders may choose not to offer troubled homeowners an opportunity to save their home. With this law in place it ensures that the lender does not deny the borrower a chance to keep their house.
Properties covered by this law
The properties covered are the residential properties that have four or less units and the borrower uses at least one of the units as his/her primary residence, thus if the foreclosure you are facing is on a an investment, vacation or a commercial property it is not protected by this Act.
150-Day Right-to-Cure Notice
The lenders are required to serve defaulting borrowers with a 150 day right to cure notice, informing them of their right to request for a mortgage modification or for any other alternative to foreclosure. Should the debtor not respond to the notice with a written offer proposing a loss mitigating option, within 30 days after receiving the notice, he/she will be considered to have surrendered his/her 150 day right to cure and the lender can use the 90 day notice.
Foreclosure alternatives available in Massachusetts other than through a lawsuit
Short Sale; the most prominent alternative option to a foreclosure, where the borrower proposes to sell his/her home and use the money to pay the mortgage debt, however his/her lender must consent to this. The lender may be reluctant to accept the offer because the proceeds amount may be less than what is owed to them; however should the short sale make sense the lender will definitely allow it because it is time saving and less costly compared to foreclosure.
Bankruptcy; By filing for bankruptcy the automatic stay will stop the lender from foreclosing on you allowing you to clear your missed monthly obligations and since bankruptcy will help you clear most of your other debts, it will help you increase your ability to pay your mortgage more at ease.
Deed in lieu; this is where you can voluntarily return the property to the lender but the lender can be totally hesitant to accept it because of issues such as the fact that they have to clear any other second and third loans that may exist on the property before they can possess it among others.
Sources:
http://www.nolo.com/legal-encyclopedia/massachusetts-foreclosure-prevention-law.html