Tuesday, July 30, 2013

Foreclosure Timeline

Fortunately the number of foreclosures we're seeing are down considerably but there are still plenty of them.  Someone recently asked in an email about the timing of the Order of Notice in the process so I thought that would be a topic for today's blog post:

The Order of Notice is part of the Servicemembers Civil Relief Act.  When a lender seeks to foreclose on a mortgage, the lender first files a complaint under that act in Land Court.  The sole issue in this proceeding is whether anyone with an interest in the home being foreclosed is serving in the military.  If yes, there are special protections but if not, the case is resolved quickly.  To resolve the case, the Land Court issues an order of notice to the lender (now the plaintiff in this lawsuit) with instructions on providing notice to the homeowner/debtor.  There are three methods used: the order of notice must be (1) served on the homeowner/debtor by the sheriff or by certified mail; (2) published once in the newspaper; and (3) recorded at the registry of deeds.  The order of notice identifies a “return date” which is the date by which the homeowner/debtor must file an answer if he’s eligible for the protection of the servicemembers statute (and a fairly recent SJC case held the only issue that can be raised in this proceeding is military status so other issues like robosigning and the like are not allowed in this forum).  Assuming no answer is filed by the return date, the court issues judgment in favor of the plaintiff/lender and this proceeding ends.  The lender can then schedule the foreclosure.

Using a recently recorded foreclosure deed as an example, here's one timeline:

  • June 28, 2006 - mortgage recorded
  • May 1, 2012 - Land Court judge signs the order of notice setting the "return date" at June 18, 2012
  • May 14, 2012 - plaintiff records order of notice at registry of deeds
  • June 18, 2012 - return date (and no one is eligible for Servicemember's protection)
  • June 19, 2012 - plaintiff's motion for judgment is allowed by court
  • June 25, 2012 - Land Court judgment issues
  • July 23, 2012 - first Notice of Sale published in newspaper (others on July 30 and August 6)
  • August 20, 2012 - foreclosure auction held at the property
  • July 10, 2013 - foreclosure deed recorded

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