Massachusetts Senate Bill S.921

Overview

Massachusetts Senate Bill S.921, presented by Senator Joanne M. Comerford and co-sponsored by other legislators, seeks to protect the equity of homeowners facing foreclosure. The bill proposes amendments to Chapter 60 of the General Laws to ensure homeowners retain more rights and receive better communication throughout the foreclosure process.

Key Provisions

1. Hearing Requirement for Tax Taking (Section 1):
   • If property taxes are unpaid for 14 days after demand, the tax collector must request a hearing in land court before exercising the power of taking.
   • Notice of the intention to exercise the power of taking and the hearing must be given 14 days prior and follow specific service and publication requirements.
   • The land court will assess the debt nature, payment status, and notice sufficiency before authorizing taking.
   • If authorized, the land court will also order a public sale of the foreclosed property and distribute proceeds, prioritizing the tax title holder as a mortgagee.
2. Clear Warning in Notices (Section 2):
   • Notices must include a bold, clear statement: “Failure to act will result in losing ownership of your property.”
3. Redemption Through Income Collection (Section 3):
   • If tax debts are paid through collected rent or other income, the tax collector must document this and withdraw possession of the property.
4. Rights Upon Tax Taking (Section 4):
   • Changes the rights conveyed upon a tax take to allow for rent collection until the debt is paid or priority payment from a judicial sale.
5. Judicial Sale and Distribution of Proceeds (Section 5):
   • The land court can order rent seizure if it fully satisfies tax liens and costs.
   • Upon foreclosure, a public sale must be ordered, treating the tax title holder as a mortgagee and the debtor as a mortgagor.
6. Detailed Redemption Notices (Section 6):
   • Redemption notices must state the amount necessary to redeem the property and the consequences of non-payment.
7. Consequences of Inaction (Section 7):
   • Language in notices must state that failure to act will result in property loss, a public sale, and possible eviction.
8. Restrictions on Vacating Foreclosure Decrees (Section 8):
   • After a judicial sale and proceeds distribution, petitions to vacate foreclosure decrees are generally prohibited except in the interest of justice.

Key Takeaways

1. Increased Transparency: Notices related to foreclosure must inform homeowners of the severe consequences of inaction, including property loss and eviction.
2. Judicial Oversight: The requirement for a court hearing before tax taking ensures judicial oversight and protection for homeowners.
3. Fairness in Debt Collection: Provisions for collecting rent or other income to satisfy tax debts offer alternatives to outright foreclosure.
4. Prioritization of Debtor Rights: Treating the tax title holder as a mortgagee and the debtor as a mortgagor aligns the process with mortgage foreclosure practices, potentially protecting homeowners’ equity.
5. Limited Post-Foreclosure Challenges: The bill restricts challenges to foreclosure decrees after judicial sale and proceeds distribution, providing finality in the process.

This legislation aims to provide more protections and transparent communications to homeowners at risk of foreclosure, ensuring they are fully aware of their rights and the consequences of their actions. To read the  bill, please click here: S921