Are deficiency judgments legal in Massachusetts?

Massachusetts is a non-judicial foreclosure state and because of this the requirements that must be met by a lender during foreclosure are very stringent. Most loan documents in Massachusetts include two clauses, one that states that a borrower has the right to provide a deed in lieu of foreclosure and the other called power of sale.  Massachusetts does not allow a lender to request a deficiency judgment from a homeowner.

Sale price of property and deficiency

In the event that a home is sold under the approved terms of auction under Massachusetts foreclosure statutes, the lender is accepting whatever amount is collected in full satisfaction of the amount owed to them.  In the event of a deficiency, the lender has agreed that they will not attempt to collect any portion of any amount that is less than the auction price versus the amount they are owed.

When lenders file deficiency judgments

The Commonwealth of Massachusetts does not provide specifically for deficiency judgments, nor do they allow any rights of redemption.  However, in the event that a lender does file for relief under a petition for deficiency judgment a homeowner could then be allowed an opportunity to redeem (e.g., gain their property back) their property.

Foreclosure attorney requirements

Because of the stringent notification requirements, Massachusetts homeowner's who are facing foreclosure may want to seek competent legal advice.  Any lender who cuts corners in notification times or tries to follow a deficiency judgment against a homeowner is not abiding by the laws.  Most homeowner's are not familiar with the foreclosure statutes, making a specialist in the field of foreclosure necessary.