What is foreclosure prevention?

Foreclosure is a legal process that allows your lender to take back your house and sell it if you don't make your mortgage loan payments on time. If your lender forecloses, you lose your house, you lose the money you have invested in your house, and you lose your good credit rating. Foreclosure prevention programs can help you avoid foreclosure if you are in trouble with your home loan.

Foreclosure prevention counseling

Foreclosure prevention counseling is a free service to help Massachusetts homeowners avoid foreclosure. Counselors review your mortgage and finances with you, discuss your options, and help you find a solution. Services include negotiating with current lenders, refinancing assistance, financial counseling, legal assistance, outreach, and consumer education.

Mortgage loan modifications

Mortgage lenders often agree to modify a loan when they will lose less money modifying the loan than by foreclosing on the house. Loan modifications usually result in lower monthly mortgage payments. You should contact your lender directly to discuss changing your mortgage loan. Each bank or mortgage lender decides on eligibility rules and benefits for their loan modification programs.

Mortgage refinancing programs

Mortgage refinancing programs help homeowners at risk of foreclosure by replacing high-cost mortgage loans with new affordable loans. Each mortgage refinancing program has its own eligibility requirements and application procedure. HOPE for Homeowners is the major federal mortgage refinancing program to help prevent foreclosures.

Other options for homeowners facing foreclosure

Homeowners who are not able to modify or refinance their loans may want to consider selling their house themselves (preforeclosure sale including short sale); voluntarily handing over the deed to their house (deed in lieu of foreclosure); or declaring bankruptcy (Chapter 13 or Chapter 7). Each of these options has disadvantages, but may be better than foreclosure. You should discuss your situation with a foreclosure counselor and lawyer before deciding what to do.

Tenant rights after foreclosure

If you are a tenant and the building in which you are living is sold at foreclosure, you have certain rights under Massachusetts law. According to the law, you do not have to move out of the building right away, even if the owner tells you to leave. The new owner must maintain the building and provide the same utilities that your previous landlord was required to provide. Regardless of the new owner's plans for the building, the owner cannot violate your rights as a tenant.

Useful links

Links to other web sites with information about foreclosure prevention.

Foreclosure Prevention Programs section last updated on 4/27/10