Each state in the U.S. handles the foreclosure process differently. As a homeowner, it is important to understand the procedure and nuances of your state's laws regarding foreclosure. Generally, states can be classified as judicial or non-judicial foreclosure states. This describes the process by which a bank can foreclose on a property. Judicial states must process foreclosures through the court system, with an individual foreclosure beginning with the lender filing a complaint. Non-judicial states do not require this process to go through the legal system and instead focuses on the lender-homeowner relationship. Massachusetts is a non-judicial state but it has proven to be very protective of the consumer in recent months. Groundbreaking cases have made it more difficult for a mortgage company to foreclose on a property in the Commonwealth.
As we reported back in January, Massachusetts set an anti-foreclosure precedent by siding with a homeowner who claimed the bank did not have the proper documentation at the time they filed to foreclose on his home. In that landmark decision, the Massachusetts Supreme Judicial Court upheld a 2009 ruling by the Massachusetts Land Court regarding foreclosure proceedings. US Bank National Association v. Ibanez arguably proved Massachusetts to be one of the most consumer-orientated and non-bank friendly states in the nation.
The Massachusetts legislature might take this consumer protectionism one step farther by making Massachusetts a judicial foreclosure state. Representative Angelo Scaccia of Boston has sponsored a bill in the Massachusetts House of Representatives that would make it necessary for lenders to go through the court system in order to foreclose on a property in Massachusetts. Representative Scaccia's proposed bill would alter Section 1 Chapter 185 of Massachusetts General Law, which addresses the terms and process of foreclosure in the state.
Certain definitions would be added to Section 1 Chapter 185 to clarify the process through which lenders would face to legally foreclose on a home. According to Representative Scaccia's bill, "foreclosure action" means any process under Chapter 244 of the General Laws or otherwise where a lender seeks to exercise its rights under a mortgage on residential property securing a loan that is in default. A lender must obtain a conditional judgment as part of the process of a foreclosure action. Additionally, "protection from foreclosure" means a court-ordered restructuring of a mortgage debt designed to eliminate an arrearage in payments on such debt and to provide a period not to exceed six months during which foreclosure is stayed.
If enacted, the law would mean that before a foreclosure is finalized on any home bought after January 7th, 2011, the lender would have to undergo an established legal process. Homes purchased before this January 7th cutoff could be protected as well, as long as the homeowners bring about the legal action within a year of the final passage of this proposed bill.
The new bill aims to help homeowners remain in their houses in the midst of a national foreclosure crisis. It would allow legal action to be taken by those who believe their foreclosure was defective because the mortgage or assign did not possess right title and interest in the mortgage at the time of the foreclosure. For Massachusetts homeowners facing overwhelming debt and possible foreclosure, this new law would provide options and the real possibility that the foreclosure of one's home must be processed in court before the home can be foreclosed on.
While the earlier Ibnanez ruling has voided many home foreclosures in Massachusetts and will make it difficult for mortgage companies to foreclose Massachusetts properties, this new bill would protect Massachusetts homeowners to a degree never before seen in the Commonwealth. For homeowners facing overwhelming debt and possible foreclosure, there would be options and legislative protection from losing one's home. If you are a Massachusetts property owner facing foreclosure, consult an experienced real estate law office such as P&P Law. We may be able to slow down or stop foreclosure proceedings on your property by virtue of the January ruling, and more changes could be in store if this new legislation passes. Consumers have options in Massachusetts and should not give up on properties because their mortgage companies are proceeding with foreclosure. Contact our office today to schedule a free consultation.
