The foreclosure process varies across the United States, but the process traditionally occurs in one of two ways: judicial or non-judicial foreclosures. Residential foreclosures in Massachusetts are non-judicial, which means that the foreclosure process happens outside of the courtroom. Non-judicial foreclosures, also known as power of sale foreclosures, allow the mortgagee to sell the property if the mortgagor defaults on their loan provided the mortgagee complies with the statutory requirements under G.L.c. 244 §§ 11-17B. In addition to the requirements under the statute, mortgagees owe mortgagors a duty of good faith and reasonable diligence to protect their interest in the property.
Until the Supreme Court's recent decision in Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019), if you were an entity engaged solely in the enforcement of security interests on loans, such as through nonjudicial foreclosure proceedings, the federal Fair Debt Collection Practices Act (the "FDCPA") would have been applied to you in some states but not others. That is because the United States Courts of Appeals were divided on the issue, with the Ninth and Tenth Circuits finding that the Act did not apply, and the Third, Fourth, and Sixth Circuits finding that it did apply. The Supreme Court resolved that Circuit split last month when it found that businesses engaged solely in security-interest enforcement do not qualify as "debt collectors" under the FDCPA.