December 11, 2025

Lawmakers advanced consideration of Massachusetts Senate Bill 1130 (“S.1130”) which was introduced on January 17, 2025, to create a statewide foreclosure mediation program. This program called the “Massachusetts Foreclosure Mediation Program” (the “Program”) is intended for owner-occupied residential properties. S.1130 appeared before the Joint Committee on the Judiciary on October 21, 2025, during a public session scheduled as “Hearing Number 11: Property”. Written testimony was accepted by email or mail with the expectation that submissions would become part of the public record once reviewed and redacted as needed. The filing of S.1130 earlier this year, and its recent hearing, suggests that Massachusetts is actively evaluating whether a formal mediation requirement should become part of the state’s foreclosure process.

Among other things, S.1130 will require the administration of a robust mediation process generally summarized by the following sequence of events. Please note that the information below is for general educational purposes only and does not constitute legal advice. Readers who have questions should consult a qualified attorney in their relevant jurisdiction before taking any action.

1. The Program receives a copy of the lender’s section 35A notice or, if section 35A does not apply, a ninety-day notice of intent to foreclose.
2. The Program sends the borrower (often times the homeowners) a notice of the right to mediation.
3. Borrowers may request mediation by submitting a mediation form within thirty (30) days after receiving the notice. At some point, borrowers will also be referred to a non-profit housing counseling agency.
4. Before mediation, the creditor must provide (a) documentation evidencing the authority to negotiate an alternative to foreclosure and (b) the following documentation: (i) proof of ownership, (ii) a net-present-value analysis, (iii) the loan history, (iv) origination income documentation, (v) loss-mitigation restrictions, and (vi) anticipated recovery after foreclosure.
5. A neutral mediator conducts the session with the borrower and the creditor’s representative, who must have authority to negotiate loss-mitigation options (including reinstatement, modification, or alternatives (such as a short sale or deed in lieu)). Additional meetings may be scheduled.
6. The borrower(s) must be given at least seven (7) days to review and sign any proposed mediation agreement, and the mediator must issue a written report within five (5) days of any session.
7. Any mediation period must end within 120 days after the borrower chooses mediation. If the borrower does not elect mediation the foreclosure process may proceed.
8. If the borrower and the creditors’ representative agree to the mediation but no agreement is reached, the foreclosure process cannot begin until the mediator certifies the creditor’s good faith effort or participation in good faith. That certificate must be included in any notices and recorded foreclosure documents.

Procedural next steps indicate that, following the hearing, the committee may issue a formal report recommending that S.1130 advance, remain under further study, or move forward with revisions before reaching the next procedural stage. For lenders and servicers, continued monitoring of S.1130 will be important as the proposal may influence pre-foreclosure procedures, documentation practices, and loss-mitigation obligations in Massachusetts.