Massachusetts Voids Foreclosures for Inadequate Paperwork

Posted on January 7th, 2011 by Mark Stopa

The nation is abuzz today about a bombshell decision from Massachusetts’ highest court, which affirmed a lower court ruling that voided two foreclosure judgments because the banks “failed to make the required showing that they were the holders of the mortgages at the time of the foreclosure.” 

The entire decision is a terrific read, but I particularly like the concurring opinion:

There is no dispute that the mortgagors of the properties in question had defaulted on their obligations, and that the mortgaged properties were subject to foreclosure. Before commencing such an action, however, the holder of an assigned mortgage needs to take care to ensure that his legal paperwork is in order. Although there was no apparent actual unfairness here to the mortgagors, that is not the point. Foreclosure is a powerful act with significant consequences, and Massachusetts law has always required that it proceed strictly in accord with the statutes that govern it. 

Why is this so significant?  The highest court in Mass. is saying, essentially, it doesn’t matter that the homeowners defaulted on their mortgage – the banks still have to prove their right to foreclose.  And if Massachusetts’ highest court is ruling this way, other courts are sure to follow.

Mark Stopa

www.stayinmyhome.com

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