In the state of Massachusetts foreclosure laws dictate that a property must be processed through the system as non-judicial. This is because it is a title theory state and the primary instrument of security is the Trust Deed. The property therefore remains in trust until the underlying loan has been repaid in full. Even though the legal documents i.e. the “Deed” is referred to commonly as a mortgage it resembles the deed of trust which contains a power of sale clause and serves the same function.
As a non-judicial foreclosure takes place, no court action is involved. The notice issued to the defaulting borrower is called a “foreclosure by sale”. This is brought into action by the power of sale clause in which the borrower agrees to a precondition whereby the trustee is allowed to sell the property if their loan goes into delinquency. This satisfies the underlying delinquent loan which is called a bond.
An attorney is the representative of the lender and they act as the trustee in the matter. Auctions to sell this property are carried out by an auctioneer, and the trustee is required to abide by stringent terms regarding the issue of all notices. In rare instances the judicial foreclosure is allowed, but this is not the norm.
If the foreclosure is uncontested and the borrower is not filing for bankruptcy the non-judicial foreclosure process takes from 75 to 90 days to complete. If all the notice requirements are not correctly met the lender has no right to pursue a deficiency judgment and in the case that notices have been fair and they do try to pursue a deficiency matter, this opens the door for a borrower to pursue rights of redemption. This has the affect of balancing the power, so rarely is either of these avenues pursued.