Let’s start by saying if you on the blink of a foreclosure, relax because it is not inevitable occurrence as there are numerous channels through which you can avoid it. In the state of Massachusetts both judicial and non-judicial foreclosure are allowed but most of them are non-judicial foreclosure thus most of the lenders will not consider filing a lawsuit with the court to foreclosure on defaulting borrowers; the state has put in place means through which you can cease a foreclosure.
The first available opportunity to stop a foreclosure is availed by the Massachusetts foreclosure prevention law. Carefully evaluate whether you are eligible for the protection. Next examine whether your lender has complied to the expectations of this law; such as whether s/he acted in good faith by first offering you a chance to find an alternative to foreclosure; whether your foreclosure is lawful or necessary and whether he correctly served you with a 150 day cure notice.
You can pay all your missed monthly payments this is effective if you can do so at least 5 days before the scheduled foreclosure sale day. If this is impossible to do so you can negotiate a repayment plan with your lender or request him/her to suspend the payments for a period of time. Alternatively, you can have a credit counselor discuss with your creditor on your behalf.
Dispute the foreclosure in court whether the foreclosure is judicial or non-judicial you can fight it in a court of law and among the defenses you may apply include: lender’s error(s), failure to follow the legal procedure or failure to observe the foreclosure statute limitation or unfair mortgage terms.
Short Sale; is where you sell your property personally and from the proceeds you get pay your outstanding mortgage debt however, your lender must consent to this offer. You have to ensure that the lender will accept the proceeds as full compensation so as to avoid deficiency judgments after your short sale because the proceeds are usually lower that your outstanding debt. The lenders will obviously be reluctant to accept a short sale but where the short sale makes sense the lender will accept as it will be time saving, less costly than a foreclosure.
Filing for bankruptcy; upon filing all efforts of lenders towards the collection of debts are stopped including foreclosure by the automatic stay; bankruptcy can either stop foreclosure permanently or extend you an extra time to be current in your obligations and the brighter side of it being the fact that it will help you get rid of your other debts thus increasing your ability to pay you mortgage more conveniently than in the past.
Deed in lieu; an arrangement where you surrender your home’s title voluntarily to the creditor and s/he accepts it as a full compensation of the outstanding debt but the downside of this option is that it has the same repercussions as a foreclosure; and the fact that lenders will agree to this offer. However, before the lender can consent to this he must be certain that your financial difficulties are genuine and that you fully understand how a deed in lieu works and that there exist no or just a few and manageable junior loans or liens that the lender has to pay off before taking the deed in lieu.