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House Passes Bill to Provide Relief and Clarity to Owners of Foreclosed Properties

Rep. Josh Cutler joined his colleagues in the Massachusetts House of Representatives to pass legislation that creates remedies for owners of foreclosed properties by providing certainty of title after three years. This ensures homeowners affected by defective titles are able to sell or refinance their properties. Currently there is no statute of limitations in which a title could be disputed.

The bill requires the foreclosure industry to provide notification regarding the effects of this bill on homeowners facing foreclosure and homeowners who were foreclosed upon.

“With this legislation we are assisting homeowners, particularly first-time buyers, while enhancing the state’s protections for individuals fighting foreclosure,” House Speaker Robert A. DeLeo (D-Winthrop) said.

“People who bought homes in good faith only to discover their titles were clouded in uncertainty have also been victims of the foreclosure crisis,” said Representative John V. Fernandes (D-Milford), House Chair of the Judiciary Committee. “This bill explicitly protects the rights of foreclosed homeowners to bring action for damages while also bringing a measure of certainty to new homeowners who bought properties in good faith.”

Under this legislation individuals who are still in their homes and actively fighting a foreclosure will not be barred by the deadlines in this act. Additionally, it will protect foreclosed-upon homeowners who have vacated the property by ensuring their right to sue lenders for triple damages for 93A violations. These updated protections follow the 2012 law that has proven successful in preventing unnecessary and unlawful foreclosures.

Additionally, the bill:

  1. Protects foreclosed owner-occupants by exempting their challenges to foreclosure from the act’s deadlines while they remain in the home;

  2. Extends benefits only to arms-length, innocent third party purchasers for value;

  3. Specifically excludes the foreclosing party from protections guaranteed by the act.

The legislation would not allow lenders to use the deadline imposed by the bill to wait the owners out.


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