1 Foreclosure Summary Massachusetts Foreclosure Law Summary Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 90 days - Right of Redemption: No - Deficiency Judgments Allowed: No In Massachusetts, lenders may foreclose on deeds of trusts or mortgages in default using either an entry by possession or non-judicial foreclosure process. Foreclosure by Possession After the borrower defaults on the mortgage, the lender may recover possession of the property by: 1) obtaining a court order; 2) entering the property peaceably; and 3) by proper consent of the buyer. If the lender maintains possession peaceably for three years from the date of possession, the borrower loses all rights of redemption. Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines". Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the foreclosure may proceed as follows: 1. A notice of sale must be recorded in the county where the property is located. The notice must also: 1) be sent, by registered mail, to the borrower at his last known address at least fourteen (14) days prior to the foreclosure sale; 2) published once a week for three (3) weeks, with the first publication being at least twenty one (21) days before the sale, in a newspaper of general circulation within the county where the property is located. Said notice must contain the place, time and date of the foreclosure hearing, the date the mortgage was recorded, the borrowers name, the amount of the default and the terms of the sale. 2. The sale must be conducted at public auction on the date, time and place specified in the notice of sale. The property will be sold to the highest bidder. The borrower has no rights of redemption. Source:
2 Massachusetts Foreclosure Law Chapter 244: Section 1 Foreclosure by entry or action; continued possession Section 1. A mortgagee may, after breach of condition of a mortgage of land, recover possession of the land mortgaged by an open and peaceable entry thereon, if not opposed by the mortgagor or other person claiming it, or by action under this chapter; and possession so obtained, if continued peaceably for three years from the date of recording of the memorandum or certificate as provided in section two, shall forever foreclose the right of redemption. Chapter 244: Section 2 Entry without judgment; memorandum or certificate; recording Section 2. If an entry for breach of condition is made without a judgment, a memorandum of the entry shall be made on the mortgage deed and signed by the mortgagor or person claiming under him, or a certificate, under oath, of two competent witnesses to prove the entry shall be made. Such memorandum or certificate shall after the entry, except as provided in section seventy of chapter one hundred and eighty-five, be recorded in the registry of deeds for the county or district where the land lies, with a note of reference, if the mortgage is recorded in the same registry, from each record to the other. Unless such record is made, the entry shall not be effectual for the purposes mentioned in the preceding section. Chapter 244: Section 3 Declaration by mortgagees; conditional judgment Section 3. The mortgagee in an action for possession may declare on his own seisin, stating that it is in mortgage; and if the court finds upon verdict or otherwise that the plaintiff is entitled to possession of the land for breach of condition, it shall upon motion of either party, except as provided in the following section, award a conditional judgment. Chapter 244: Section 4 Procedure Section 4. Unless the defendant is the mortgagor or his assignee, or entitled to hold or claim the land under the mortgagor or his assignee, he shall not redeem the land nor have a conditional judgment, except with the consent of the plaintiff, but the action shall be conducted like an action for possession, and in all cases the judgment for the plaintiff may be entered for possession as at common law, unless one or the other of the parties moves for the conditional judgment.
3 Chapter 244: Section 5 Form of conditional judgments generally Section 5. If the conditional judgment is to be entered, the court shall determine the amount due to the plaintiff on the mortgage, and shall enter judgment that if the defendant within two months after the judgment pays to the plaintiff such amount with interest and the costs, the mortgage shall be void, and the defendant shall hold the land discharged thereof; otherwise, that the plaintiff shall have execution for possession and for costs. Chapter 244: Section 6 Form in special cases Section 6. If the condition of the mortgage is not for the payment of money, or if a part only of the money, the payment of which is secured by the mortgage, is due, the court shall vary the terms of the judgment as the case may require, but shall award execution as before provided unless the defendant within two months after the judgment performs the conditions thereof. Chapter 244: Section 7 Discharge or release on satisfaction of execution Section 7. If, after an execution on a judgment for possession has been levied, the amount due on the mortgage and costs are paid in full, the mortgagee, his executor, administrator or assigns shall, at the expense of the mortgagor, enter on the margin of the record of the execution an acknowledgment of satisfaction or make to the mortgagor a deed of release, which shall be recorded with notes of reference to the execution discharged thereby. Chapter 244: Section 8 Form of action; parties Section 8. The entry may be made or the action brought by an assignee of the mortgagee. The action for possession may be brought, and shall be conducted as if brought by the original mortgagee. The mortgagor may be joined therein as a defendant irrespective of his estate in the land; but if he has no estate in the land and makes no defence to the action, he shall not be liable for costs. Chapter 244: Section 9 Right of entry before breach Section 9. This chapter shall not prevent a mortgagee or person claiming under him from entering on the land or from recovering possession thereof before breach of condition of the mortgage, if there is no agreement to the contrary; but if the debt is afterward paid or the mortgage redeemed, the amount of the clear rents and profits from the time of the entry shall be accounted for and deducted from the amount due on the mortgage.
4 Chapter 244: Section 10 Foreclosure and redemption where entry made before breach Section 10. A mortgagee, or a person claiming under him in possession under the preceding section, may, after breach of condition, make a new formal entry for breach of condition, or bring an action, under section one, with the same effect as if he were not in possession; or he may foreclose the right of redemption by giving, after breach of condition, to the mortgagor, or person claiming under him, a written notice that he will thenceforward hold the land for the purpose of foreclosure and causing a certificate in proof thereof to be recorded within thirty days after such notice as in case of an original entry. If such notice is given and recorded, the three years limited for redemption shall run from the date of giving the notice. Chapter 244: Section 11 Mortgages containing power of sale; court order for sale Section 11. If a conditional judgment has been entered upon a mortgage containing a power of sale, the court shall, instead of issuing a writ of possession, at the request of the plaintiff order the property to be sold pursuant to such power. The plaintiff shall thereupon execute the power and do all things required by it or by the court. Chapter 244: Section 12 Procedure after sale Section 12. The person selling shall, within ten days after the sale, file in the clerk's office a report on oath of the sale and of his doings, and the court may confirm the sale or set it aside and order a re-sale. Any person interested may appear or be summoned, and the order of the court confirming the sale shall be conclusive evidence against all persons that the power of sale was duly executed. Chapter 244: Section 13 Necessary parties Section 13. Unless the defendant is seized in fee simple in possession of the whole equity of redemption of the land demanded, an order for a sale shall not be made until all parties interested in the equity of redemption and whose estate or interest therein would be affected by such sale have been summoned to appear. Chapter 244: Section 14 Foreclosure under power of sale; procedure; notice; form Section 14. The mortgagee or person having his estate in the land mortgaged, or a person authorized by the power of sale, or the attorney duly authorized by a writing under seal, or the legal guardian or conservator of such mortgagee or person acting in the name of such mortgagee or person, may, upon breach of condition and without action, do all the acts authorized or required by the power; but no sale under such power shall be effectual to foreclose a mortgage, unless, previous to such sale, notice thereof has been published once in each of three successive weeks, the first publication to be not less than twenty-one days before the day of sale, in a newspaper, if any, published in the town where the land lies or in a newspaper with general circulation in the town where the land
5 lies and notice thereof has been sent by registered mail to the owner or owners of record of the equity of redemption as of thirty days prior to the date of sale, said notice to be mailed at least fourteen days prior to the date of sale to said owner or owners to the address set forth in section sixty-one of chapter one hundred and eighty-five, if the land is then registered or, in the case of unregistered land, to the last address of the owner or owners of the equity of redemption appearing on the records of the holder of the mortgage, if any, or if none, to the address of the owner or owners as given on his deed or on the petition for probate by which he acquired title, if any, or if in either case no address appears, then to the address to which the tax collector last sent the tax bill for the mortgaged premises to be sold, or if no tax bill has been sent for the last preceding three years, then to the address of any of the parcels of property in the name of said owner of record which are to be sold under the power of sale and unless a copy of said notice of sale has been sent by registered mail to all persons of record as of thirty days prior to the date of sale holding an interest in the property junior to the mortgage being foreclosed, said notice to be mailed at least fourteen days prior to the date of sale to each such person at the address of such person set forth in any document evidencing the interest or to the last address of such person known to the mortgagee. Any person of record as of thirty days prior to the date of sale holding an interest in the property junior to the mortgage being foreclosed may waive at any time, whether prior or subsequent to the date of sale, the right to receive notice by mail to such person under this section and such waiver shall be deemed to constitute compliance with such notice requirement for all purposes. If no newspaper is published in such town, or if there is no newspaper with general circulation in the town where the land lies, notice may be published in a newspaper published in the county where the land lies, and this provision shall be implied in every power of sale mortgage in which it is not expressly set forth. A newspaper which by its title page purports to be printed or published in such town, city or county, and having a circulation therein, shall be sufficient for the purpose. The following form of foreclosure notice may be used and may be altered as circumstances require; but nothing herein shall be construed to prevent the use of other forms. (Form.) MORTGAGEE'S SALE OF REAL ESTATE. By virtue and in execution of the Power of Sale contained in a certain mortgage given by %y(10)27 to %y(10)27 dated %y(10)27 and recorded with %y(72)27 %y(78)27 %4Aw%W27 %W27 %4AwDeeds, Book%y(10)27, page %y(10)27, of which mortgage the undersigned is the present holder, %y(10)27. (If by assignment, or in any fiduciary capacity, give reference.) %y(78)27%4aw%w27%4aw for breach of the conditions of said mortgage and for the purpose of foreclosing the same will be sold at Public Auction at %y(10)27 o'clock, %y(3)27.m. on the %y(10)27 day of
6 %y(10)27 A.D. (insert year), %y(10)27 (place) %y(10)27 all and singular the premises described in said mortgage, (In case of partial releases, state exceptions.) To wit: ""(Description as in the mortgage, including all references to title, restrictions, encumbrances, etc., as made in the mortgage.)'' Terms of sale: (State here the amount, if any, to be paid in cash by the purchaser at the time and place of the sale, and the time or times for payment of the balance or the whole as the case may be.) Other terms to be announced at the sale. (Signed) %w6d %y(20)6d %4Aw%W6D%4Aw Present holder of said mortgage. A notice of sale in the above form, published in accordance with the power in the mortgage and with this chapter, together with such other or further notice, if any, as is required by the mortgage, shall be a sufficient notice of the sale; and the premises shall be deemed to have been sold, and the deed thereunder shall convey the premises, subject to and with the benefit of all restrictions, easements, improvements, outstanding tax titles, municipal or other public taxes, assessments, liens or claims in the nature of liens, and existing encumbrances of record created prior to the mortgage, whether or not reference to such restrictions, easements, improvements, liens or encumbrances is made in the deed; but no purchaser at the sale shall be bound to complete the purchase if there are encumbrances, other than those named in the mortgage and included in the notice of sale, which are not stated at the sale and included in the auctioneer's contract with the purchaser. Chapter 244: Section 15 Copy of notice; affidavit; recording; evidence Section 15. The person selling, or the attorney duly authorized by a writing or the legal guardian or conservator of such person, shall, after the sale, cause a copy of the notice and his affidavit, fully and particularly stating his acts, or the acts of his principal or ward, to be recorded in the registry of deeds for the county or district where the land lies, with a note or reference thereto on the margin of the record of the mortgage deed, if it is recorded in the same registry. If the affidavit shows that the requirements of the power of sale and of the statute have in all respects been complied with, the affidavit or a certified copy of the record thereof, shall be admitted as evidence that the power of sale was duly executed. Chapter 244: Section 15A Mortgagee taking possession or conveying title; notice
7 Section 15A. A mortgagee taking possession of mortgaged premises prior to foreclosure or a mortgagee conveying title to mortgaged premises pursuant to the provisions of this chapter shall, within thirty days of taking possession or conveying title, notify all residential tenants of said premises, and the office of the assessor or collector of taxes of the municipality in which the premises are located and any persons, companies, districts, commissions or other entities of any kind which provide water or sewer service to the premises, of said taking possession or conveying title. Chapter 244: Section 17 Conveyance by mortgagor; effect Section 17. A sale or transfer by the mortgagor shall not impair or annul any right or power of attorney given in the mortgage to the mortgagee to sell or transfer the land as attorney or agent of the mortgagor. Chapter 244: Section 17A Limitation of actions Section 17A. Actions on mortgage notes, whether witnessed or not, or on other obligations to pay a debt secured by mortgage of real estate, to recover judgments for deficiencies after foreclosure by sale under a power contained in the mortgage, and actions on such notes or other obligations which are subject to a prior mortgage, to recover the amount due thereon after the foreclosure by sale of such prior mortgage under power contained therein, shall, except as hereinafter provided, be commenced within two years after the date of the foreclosure sale or, if the principal of the note or other obligation does not become payable until after the foreclosure sale, then within two years after the time when the cause of action for the principal accrues. Such actions in cases where the foreclosure sale shall have occurred or the cause of action shall have accrued prior to January first, nineteen hundred and forty-six shall be commenced within two years after said date. Nothing in this section shall extend any other period of limitation. Chapter 244: Section 17B Notice of intention to foreclose; necessity; form; notice and affidavit Section 17B. No action for a deficiency shall be brought after June thirtieth, nineteen hundred and forty-six by the holder of a mortgage note or other obligation secured by mortgage of real estate after a foreclosure sale by him taking place after January first, nineteen hundred and forty-six unless a notice in writing of the mortgagee's intention to foreclose the mortgage has been mailed, postage prepaid, by registered mail with return receipt requested, to the defendant sought to be charged with the deficiency at his last address then known to the mortgagee, together with a warning of liability for the deficiency, in substantially the form below, not less than twenty-one days before the date of the sale under the power in the mortgage, and an affidavit has been signed and sworn to, within thirty days after the foreclosure sale, of the mailing of such notice. A notice mailed as aforesaid shall be a sufficient notice, and such an affidavit made within the
8 time specified shall be prima facie evidence in such action of the mailing of such notice. The notice and affidavit, respectively, shall be in substantially the following forms: Notice of Intention to Foreclose and of Deficiency After Foreclosure of Mortgage. To A.B.%y(14)b6Street You are hereby notified, in accordance with the statute, of my intention, on or after %y(5)b6, to foreclose by sale under power of sale for breach of condition, the mortgage held by me on property on %y(5)b6 Street in %y(5)b6 in the County of %y(5)b6 dated %y(8)b6 and recorded with %y(8)b6 deeds Book %y(5)b6 page %y(5)b6 to secure a note (or other obligation) signed by you, for the whole, or part, of which you may be liable to me in case of a deficiency in the proceeds of the foreclosure sale. Affidavit. Yours very truly, C.D. Holder of said mortgage. I hereby certify on oath that on the %y(3)b6 day of (insert year) I mailed by registered mail, postage prepaid and return receipt requested, the notice, a copy of which appears below, directed to the persons or person at the addresses therein named which were the last addresses of such persons known to me at the time of mailing. (Here insert copy) Signed and sworn to before me this %y(3)b6 day of %y(5)b6 (insert year) %w27 Chapter 244: Section 17C Waiver of provisions of sections 17A and 17B; validity Section 17C. The provisions of sections seventeen A and seventeen B shall not be waived, and any agreement to waive them or covenant not to rely upon them made before suit is commenced shall be void. Chapter 244: Section 18 Persons authorized to redeem Section 18. The mortgagor or person claiming or holding under him may, after breach of condition, redeem the land mortgaged, unless the mortgagee, or person claiming or holding under him, has obtained possession of the land for breach of condition and has continued that possession for three years, or unless the land has been sold pursuant to a power of sale contained in the mortgage deed. Chapter 244: Section 19 Tender of payment or performance
9 Section 19. The person entitled to redeem shall pay or tender to the mortgagee, or person claiming or holding under him, the whole amount then due and payable on the mortgage, and shall perform or tender performance of every other condition contained therein; and if there has been an action to recover the land he shall pay or tender the costs of such action if unpaid. Chapter 244: Section 20 Accounting Section 20. If the mortgagee or person claiming or holding under him has had possession of the land, he shall account for rents and profits, and be allowed for all amounts expended in reasonable repairs and improvements, for all lawful taxes and assessments paid and for all other necessary expenses in the care and management of the land. A balance of such account, if due from him, shall be deducted from the debt due on the mortgage; if due to him, shall be added to the debt, and paid or tendered as such. Chapter 244: Section 21 Time for tender; suit for redemption Section 21. The tender may be made before the expiration of the three years limited for redemption, and before or after entry for breach of condition, and before a sale pursuant to a power contained in the mortgage; but if the mortgagee or person claiming or holding under him does not accept the tender and discharge the mortgage, the tender shall not prevent the foreclosure unless, within one year after the tender, the mortgagor or person claiming or holding under him commences suit for redemption and when he commences suit pays to the clerk of the court the amount tendered for the use of the party entitled thereto. Chapter 244: Section 22 Suit without previous tender Section 22. The person entitled to redeem may, before the expiration of the three years limited for redemption, and before or after an entry for breach of condition, and before a sale pursuant to a power contained in the mortgage, commence suit for redemption without previous tender, and may in such suit offer to pay such amount as shall be found due from him, or to perform such other condition as the case may require; but a mortgagee who has published a notice of sale prior to the commencement of such suit may proceed with said sale unless the amount due is paid into court or the sale enjoined. Chapter 244: Section 23 Amounts not in dispute; order for payment Section 23. The court may determine, by a reference to a master or otherwise, whether any and what amount due on the mortgage is not in dispute, and may by an interlocutory decree order it paid to the mortgagee, or for his use to the clerk of the court. Chapter 244: Section 24 Costs Section 24. The court may award costs in the suit for redemption to either party; but if suit is brought without previous tender and it is found that the condition of the mortgage
10 has not been performed, the plaintiff shall pay costs of suit, unless the court finds that the defendant has unreasonably refused or neglected, when requested, to render a just and true account of the money due upon the mortgage and of rents and profits and amounts paid for taxes, repairs, improvements and other necessary expenses, or that he otherwise by his default prevented the plaintiff from performing or tendering performance of the condition before commencement of suit. Chapter 244: Section 25 Defective tender Section 25. If suit was commenced before the expiration of the three years limited for redemption, and before or after entry for breach of condition, the plaintiff shall, although the tender alleged is found to be insufficient, be entitled to a decree for redemption as if no previous tender had been alleged. Chapter 244: Section 26 Venue Section 26. Except as provided in section forty, a suit for redemption shall be brought in the county where the land or any part thereof lies. Chapter 244: Section 27 Judgment of possession Section 27. If the court finds the plaintiff entitled to redeem, it shall determine the amount due on the mortgage or what condition the plaintiff is bound to perform for the redemption of the land, and shall enter judgment that, upon payment of such amount or performance of such condition within such time as it shall order, the plaintiff shall have execution for possession of the land and shall hold it discharged of the mortgage. Chapter 244: Section 28 Interest Section 28. If the court finds that the mortgagee has not unreasonably neglected or refused to render a true account of rents and profits of the land mortgaged, it may award him the balance found due on the mortgage, with interest thereon at a rate of not more than twelve per cent a year from the expiration of three years after the entry to the date of the judgment. Chapter 244: Section 29 Execution for possession Section 29. The court may at the same time order that, if the defendant neglects or refuses to accept the money or other act required by the judgment to be paid or performed, the money shall be left for his use with the clerk of the court, or such other act done as the case requires; and the plaintiff, having performed all acts required by the judgment, may have execution for possession of the land. Chapter 244: Section 30 Judgment and execution for balance
11 Section 30. If the court finds that the defendant has received from rents and profits of the land or otherwise more than is due on the mortgage, it shall award judgment and execution against him for the amount due to the plaintiff; and if there are several defendants, such judgment and execution may be awarded against them, either jointly or severally, for the amounts received by them or any of them, respectively. Chapter 244: Section 31 Distribution of money tendered and paid into court Section 31. The court may order the amount found due the plaintiff for rents and profits or costs, if any, to be deducted from the amount found due the defendant, to whom the balance only shall be paid from any money tendered or brought into court, and the residue, if any, shall be paid to the plaintiff. Chapter 244: Section 32 Intervention Section 32. If a person, other than the parties to a suit for redemption, is interested therein, the court may, upon terms, allow him to intervene. Chapter 244: Section 33 Survival of right of redemption Section 33. If the person entitled to redeem a mortgaged estate dies, his heirs, devisees, executor or administrator may make a tender or commence or prosecute a suit for redemption which the deceased might have made, commenced or prosecuted. Chapter 244: Section 34 Tender to guardian or conservator Section 34. A tender may be made to a guardian or conservator, who may, upon satisfaction, execute a release of the mortgage. Chapter 244: Section 35 Opening foreclosure; right of redemption Section 35. If, after the foreclosure of a mortgage not containing a power of sale, the person entitled to the debt recovers judgment for any part thereof on the ground that the value of the land mortgaged at the time of the foreclosure was less than the amount due, such recovery shall open the foreclosure, and the person entitled may redeem the land although the three years limited therefor have expired, if suit for redemption is brought within one year after the recovery of such judgment. Chapter 244: Section 36 Excess received by mortgagee; recovery Section 36. If a mortgagee or person claiming or holding under him receives from rents and profits of the land, or upon a tender made to him, or in any other manner, more than is due on the mortgage, and no suit for redemption is brought against him, the mortgagor or other person entitled to such excess may recover it in a civil action. Chapter 244: Section 37 Discharge of mortgages held by commonwealth
12 Section 37. If a mortgage is held by the commonwealth, the state treasurer may demand and receive the money due, and upon payment shall make and acknowledge a discharge. Chapter 244: Section 38 Foreclosure Section 38. If the condition of such mortgage is not duly performed, the state treasurer may cause an entry for breach of condition to be made in the name and behalf of the commonwealth by himself or a person whom he appoints, or he may bring an action in the name of the commonwealth to recover possession of the land mortgaged; and possession obtained by entry or by action shall have the same effect in foreclosing the right of redemption as a similar possession by any other mortgagee. Chapter 244: Section 39 Redemption generally Section 39. The mortgagor or his assigns may redeem the land in like manner and upon like terms as if held by any other mortgagee, and the payment or performance of the condition shall be made or tendered to the state treasurer. Chapter 244: Section 40 Action for redemption; jurisdiction; process; payments; discharge Section 40. If the state treasurer and the person applying to redeem the mortgage do not agree upon the amount due, the person so applying may bring in the supreme judicial or the superior court, for the county of Suffolk, civil action against the commonwealth for the redemption. The process shall be served on the state treasurer, who shall appear and answer in behalf of the commonwealth; and like proceedings shall be had and like judgment rendered as in case of other mortgagees, except that the state treasurer shall accept any payment due the commonwealth, and upon receipt thereof, or upon performance of such other condition as the court orders, shall discharge the mortgage in like manner as when the debt is paid without suit.