On May 1, 2008 the new Massachusetts foreclosure law will go into effect. Most importantly for homeowners facing foreclosure is the new 90-day right to cure mortgage defaults before foreclosure.
The key to this new right is that legal fees and foreclosure costs cannot be imposed on consumers during the right-to-cure period. This is significant because often mortgagee legal fees are significant and can be the difference between a successful cure and foreclosure. Under the new law, if a consumer cures their default within the 90-day period after notice of default, the loan will be reinstated as current without additional charges.
It likely will be advisable for people facing foreclosure who are not able to cure their default before the expiration of the cure period to file a bankruptcy case before it expires. This is because the mortgage proof of claim filed in the bankruptcy case under these circumstances cannot include fees and costs, making a Chapter 13 plan proposed to cure arrears easier and more likely to succeed.
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