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When you signed your mortgage, you agreed to make all your payments on time. If you miss payments you are in “default,” or you “default on your mortgage.” Paragraph 22 of most mortgages is the place that says you give the bank* the right to foreclose if you default on your mortgage. Look at paragraph 22 of your mortgage to see if it says you agree the bank can foreclose if you default or miss payments.
In Massachusetts, the bank does not have to go to court to foreclose on your house. The bank, or mortgage holder, can hold an auction to foreclose on your home. The bank announces that it is selling your house on a certain date. The bank can sell your home to the person who offers the most money.
When banks foreclose on a property without going to court is using the "power of sale." But to use the power of sale, banks must follow all the terms of the mortgage and obey state foreclosure laws.
What to expect if you miss mortgage payments
If you fall behind on your mortgage payments, the bank can only foreclose if they give you the right notices, record the notices and publish the auction in the newspaper. They must:
Once the bank has followed all the steps after you miss your payments, they can hold an auction and sell your home to the buyer who offers the most money.
* When we use the word 'bank' we mean your lender. This could be a mortgage company a trust or even a person.
Produced by Massachusetts Law Reform Institute Created July 2013