My mortgage was foreclosed recently and I have asked the mortgage company that serviced my mortgage to give me an accounting as to where the proceeds of the sale went. My property was sold to a third party. Am I entitled to that?

The basic contractual relationship between a borrower and a lender, is that the lender agrees to loan money to a borrower and agrees to take payments over time at a set or variable rate of interest and will not demand payment sooner so long as the borrower continues to pay on the note. As security for the note a borrower grants a lender a mortgage on the borrower's property. If the borrower fails to make payments on the note the lender has the option of “accelerating” the amount due on the note and can demand payment in full. If the borrower fails to make that payment in full, the lender can then foreclose on the mortgage. If the lender gets less than what is due on the mortgage, the lender can sue the borrower for the difference between what was obtained at the auction and what was due as of the auction date. Conversely if the lender gets more at the auction than is due the lender, the lender is required to pay that surplus to the barrower or any junior lienholder on the property that may be entitled to it. That is the basic contractual law that has existed for a long time. However in addition to that, under the statute passed by the Massachusetts Legislature as Chapter 206 of 2007 the holder of a mortgage is required to provide a written notice containing an itemized accounting of the disposition of the proceeds arising from a foreclosure sale including but not limited to the sale price, legal fees, auctioneer fee,  publication costs and other fees and any surplus due to the borrower within 60 days after the receipt of such funds. So your mortgage company is not only obligated under the basic contract law but is also obligated under that statute. If a mortgage company fails to provide that information after you have requested it, the mortgage company will probably will have liability to you under our consumer protection statute which provides for up to three times actual damages plus attorneys fees.

If you have questions about this or any other real estate matter, please contact Tom Bennett at (617) 531-6574 or tvb@barronstad.com.