Massachusetts' new “Right to Cure Your Mortgage Default” notice has been voluntary, but starting next month it becomes mandatory.
The notice, introduced in March, provides a standardized process that lenders and servicers will be required to start using as of May 21 to inform borrowers of a mortgage default, and when disclosing repayment options to prevent a foreclosure.
Under the state's rules, there are two types of notice that have to be sent to borrowers: a 150 day notice and a 90 day notice. The 90 day notice can be used in the mortgagee demonstrates “good faith effort” to cure the default.
To do this, the mortgagee must certify it has made “a good faith effort to negotiate a commercially reasonable alternative to foreclosure.” The mortgagee must also certify involvement at least one meeting between a creditor's representative and the borrower, the borrower's attorney or the borrower's representative. This may be attended in person or by phone. The creditor must 10 days in advance of the meeting send through first class and certified mail send documentation of the good faith effort to negotiate a reasonable alternative to foreclosure. After the meeting, the mortgagee must provide evidence that the creditor and the borrower did not resolve their dispute.
If the mortgagee can demonstrate the borrower has failed to respond within 30 days to mailed communication offering a commercially reasonable alternative to foreclosure, the borrower will forfeit his or her right to a 150 day cure period and the mortgagee can instead send a 90 day notice.
Borrowers have a right to cure defaults once during any three year period, regardless of mortgage holder.
The right to cure notice can be delivered by hand, first class and certified mail or similar service offered by a private carrier. The notice will have to be delivered to the mortgagor at the address last known to the mortgagee “or anyone holding thereunder.” There are some specifications regarding which parties are authorized to send the notice, including those authorized to collect on the default.
There are many detailed and specific requirements in terms of wording listed on the Massachusetts government website that the notice must conform with. These include the listing of the phrase, “This is an important notice concerning your right to live in your home, have it translated at once,” in four languages in addition to English.
Also the notice also clearly states that if the borrower does not pay the past due amount stated by a specified date, he or she will be evicted and a new buyer will take ownership of the home. It also gives the borrower suggested resources for assistance and alternatives, as well as information regarding how to contact the mortgagee if the borrower has any questions or disagrees with the calculation of the past due balance.
