Foreclosure Prevention Programs
and Tenant Rights After Foreclosure
What is foreclosure prevention?
Foreclosure is a legal process by which a lender can take back your house and sell it if you don't make your mortgage loan payments on time. If your lender forecloses, you will lose your house, lose money you have invested in your house, and 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 Worcester 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.
For a list of approved agencies with free foreclosure counseling programs for Worcester residents, see Where can I get foreclosure prevention counseling? on MassResources.org. You can also call the Homeowner's HOPE Hotline at 1-888-995-HOPE.
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. Each bank or mortgage lender decides on eligibility rules and benefits for their loan modification programs.
If you are in trouble with your loan, you should contact your lender or mortgage servicer to discuss your options. Your lender usually won't offer a loan modification or other solution unless you ask for it. For more information, see Mortgage Loan Modifications on MassResources.org.
Mortgage refinancing programs
Mortgage refinancing programs help homeowners at risk of foreclosure by replacing high-cost mortgage loans with new affordable loans. When you refinance your mortgage:
you pay off your current unaffordable house loan
you get a new loan with lower monthly payments that are within your budget
you get to keep your house
Refinancing programs to prevent foreclosures include HOPE for Homeowners, the Home Affordable Refinance Program, and the Neighborhood Assistance Corporation of America (NACA) Refinance Program. Each program has its own eligibility requirements and application procedure.
For details, see How do I apply for mortgage refinancing? on MassResources.org. You can also call the Homeowner's HOPE Hotline at 1-888-995-HOPE.
Other options for homeowners facing foreclosure
If you are not able to modify or refinance your loan, may want to consider other options: (1) selling your house yourself (short sale or other preforeclosure sale); (2) voluntarily handing over the deed to your house (deed in lieu of foreclosure); or (3) 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.
For more information, see Other options for homeowners facing foreclosure on MassResources.org.
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. You also have the right to a court hearing.
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.
More information about Foreclosure Prevention is on our statewide web site, MassResources.org. When you click on the link below, you will go to MassResources.org. Click "Back" on your browser to return to WorcesterResources.org.