28 Dec Unreasonable Massachusetts Foreclosures
Statutory foreclosure procedure in Massachusetts requires two weeks’ advance notice to the borrower by certified mail and two weekly classified advertisements at least one week before the foreclosure sale. The sale is considered complete when the memorandum of sale is signed at the foreclosure sale’s auction, even if the successful bidder has 30 days to finish paying the bid price.
Courts have also ruled that foreclosing lenders must act in good faith and use reasonable diligence. However, until recently an unfortunate borrower victimized by unreasonably minimal foreclosure procedures were left to actual monetary remedies – usually limited to a loss of equity which often does not exist.
In January of 2007, U.S. Bankruptcy Judge Robert Somma enjoined the completion of a foreclosure sale (that 30 days to finish paying) because the foreclosing lender did not take any action to market the property, including contacting a broker. Strayton v. Champion Mortgage, div. of Key Bank USA, NA (In re Strayton). Judge Somma also took issue with the absence of an appraisal or broker price opinion, presumably to allow the lender to cancel the auction if the bid price did not approach market value. In this case, the $130,000.00 bid price was notably less than the market value of at least $325,000.00. My hat is off to Attorney Richard S. Ravosa.
On November 30, 2007, Judge Somma enjoined an eviction based upon a similarly suspect foreclosure sale. Yoyo v. AMC Mortg. Servs. (In re Yoyo). Congratulations to Attorney Robert K. Cabana.
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