Owner's Affidavit
(Deed in Lieu of Foreclosure) (Commercial) (MA)

Summary

This template is an owner's affidavit that can be used in Massachusetts when a defaulting borrower transfers title to real property to a secured lender via a deed in lieu of foreclosure. It includes practical guidance and drafting notes. Massachusetts lenders primarily use mortgages as the preferred method to obtain a security interest in real property as collateral for a debt. There are four methods of foreclosure in Massachusetts: • Nonjudicial foreclosure pursuant to a statutory power of sale provided for in the terms of the mortgage (see ALM GL ch. 244, § 14–ALM GL ch. 244, § 17) • Peaceable entry, in which the lender peaceably retakes possession of the collateral property for three years (see ALM GL ch. 244, § 1) • Judicial foreclosure (see ALM GL ch. 244, §§ 4–11) • Bill in equity which gives courts the power to make equitable remedies of land disputes, including mortgages (see ALM GL ch. 185, § 1) A quicker and less expensive—albeit riskier—method for a lender to take title to the real property that serves as collateral for a loan is through the negotiated process of a deed in lieu of foreclosure. An owner's affidavit is required by Massachusetts title companies in order to issue the final title policy to the owner, which in the case of a deed in lieu of foreclosure transaction, is the lender. This template contains representations customarily required by Massachusetts lenders and title insurance companies as a contingency to issuing the final title policy in a typical purchase and sale transaction as well as additional representations necessitated by the use of a deed in lieu of foreclosure. For a deed in lieu of foreclosure template, see Deed in Lieu of Foreclosure Agreement (Commercial) (Pro-Lender) (MA). For general information on foreclosure and defaults in Massachusetts, see Foreclosure Resource Kit (MA), Commercial Foreclosure (MA), and Borrower Defaults and Lender Remedies (Commercial Real Estate Loans) (MA). For guidance on financing commercial real estate in Massachusetts, see Commercial Real Estate Acquisition Loan Resource Kit (MA) and Commercial Mortgage Loan Process Checklist (Pro-lender) (MA). See also Junior Associate Real Estate Resource Kit (Acquisition Finance). For further guidance on lender remedies and property transfers in Massachusetts see Commercial Real Estate Financing (MA) and Purchase and Sale of Commercial Real Property (MA). For guidance on commercial loan workouts see Workouts of Commercial Real Estate Loans. For a full listing of key content covering the purchase and sale of commercial real estate in Massachusetts, see Purchasing and Selling Commercial Real Estate Resource Kit (MA). See also Junior Associate Real Estate Resource Kit (Commercial Purchase and Sale). For a list of key resources covering real estate-related tasks for associates, in-house attorneys, and interns, see First Year Associate Resource Kit: Real Estate, Summer Associate Resource Kit: Real Estate, In-House Real Estate Resource Kit, and Federal Government Summer Intern Resource Kit: Real Estate.