Massachusetts has joined a growing number of States (Commonwealths) seeking to find some relief for homeowners struggling with the foreclosure situation. The new law that went into effect on May 1st allows homeowners an additional sixty days to sell their homes. This law also allows homeowners to work out some agreeable loan modification with their lenders before the lender(s) will be allowed to continue towards auctioning off the property. 

 In the past, homeowners were limited to thirty days to respond to the complaint. Once those thirty days expired, the lender was allowed to continue with the foreclosure process. The new law allocates an additional sixty days, allowing a total ninety days before the bank will be able to proceed. This time restructure gives homeowners and lenders a lot more time to work on short sale options and loan restructuring.

This law may seem well and good, but it has many downsides. For instance, many homeowners have abandoned their homes already, banks are less forgiving to write-down the unpaid balance, new personal notes are issued for the unpaid balance and more often, owners lack knowledge or motivation to work through the entire process. There’s a lot of misinformation out there, make sure you talk with legal council to protect yourself and your future.

 Are the new laws that are being imposed in Massachusetts and other States only prolonging the housing foreclosure issue? If the market continues to decline and banks hold homeowners accountable for short sale or auction deficits, the homeowners will be stuck with higher debts in the future and more legal expenses when the home finally sells. The new law may just be postponing the final results with added expenses to all.

Use the added time the law allows to work for you; get your home sold if you can’t afford it now or in the future.