Foreclosure is the process through which the lender in a mortgage takes ownership and/or possession of the property that secured the original loan. This happens when a debtor in Millbury, Massachusetts has repeatedly failed to make their payments. Foreclosure typically results in the property being sold in an auction. Banks typically want to get rid of the property as soon as possible, even if it means taking a financial hit, and an auction is the easiest way to do this.
In every state, including Massachusetts, there is an option to go through foreclosure by a judicial sale, which is a procedure in which a court supervises the sale of the property, and makes sure that the proceeds first go the to the holder of the mortgage, then to anyone else who may have a lien on the property, and finally to the debtor if anything is left. In many states, original mortgages (as opposed to refinanced loans) are "non-recourse" loans, meaning that the most the lender can collect is whatever the foreclosed property sells for. The bank cannot go after the borrower for the balance, if the sale nets less than the amount due. You should consult a lawyer in Millbury, Massachusetts to learn the details of the law here. You should also know that this rarely applies to loans which have been refinanced.
How Can I Avoid Foreclosure in Massachusetts?
First of all, you shouldn't ignore the problem. You should stay in contact with your bank, and be forthright with them. Ignoring the issue will not make it go away. It is essential to remember that banks don't really want to own homes in Millbury. In issuing a mortgage, they expect to make a profit through interest on the loan, and they'd prefer to continue collecting from you. Therefore, they're likely to make reasonable accommodations to your financial situation if it will enable you to keep paying them in the long run.
If no deal can be worked out, or the mortgage payments have become prohibitive, you might consider a "short sale". While the lender has to consent to it, many will take a moderate loss if it means avoiding foreclosure (which lenders usually treat as a last resort). This allows you to sell the house for whatever price it can fetch on the current market, and hand the proceeds over to the bank. If the sale nets less than the balance, some or all of the deficiency might be forgiven. You might also consider a "short refinance" which allows a chunk of the debt to be forgiven, and lets you refinance the rest.
How Can A Millbury, Massachusetts Attorney Help?
If you are facing the possibility of foreclosure, a good Millbury, Massachusetts real estate attorney can help. At the very least, they will be able to inform you of your legal options.