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Massachusetts Homeowners Challenge Foreclosure in Multiple Actions

Some foreclosure cases can become complicated, especially when multiple actions are filed in different courts with jurisdiction over a particular aspect of the dispute. In Merrill Lynch Credit Corp. v. Bishay (Mass. Dist. Ct. May 6, 2016), the foreclosure sale purchaser brought a residential summary process action against the former owners after they refused to vacate their home. The action was stayed while the former owners challenged the purchaser’s title in a separation action. The former owners then moved to amend their answer and counterclaim in the current case. The trial court denied the motion to amend and entered judgment awarding possession of the property to the purchaser.Foreclosure proceedings

In Bishay, the defendants were owners of the residential property at issue. In 2004, the defendants borrowed $650,000 from the bank, secured by a mortgage on the property. After the defendants eventually defaulted on the loan, the bank initiated foreclosure proceedings. The plaintiff acquired title to the property pursuant to a foreclosure deed, following an auction conducted by the bank. When the defendants failed to vacate the premises, a summary process action was filed against them. The defendants also challenged the validity of the title to the property in a separate action in the Land Court. The District Court action was stayed pending the outcome of the challenge to the title.

On appeal, the issue before the Massachusetts District Court was whether the judge erred in denying the defendants’ motion to amend their answer filed in the residential summary process action. In Massachusetts, the rules of civil procedure allow any party to amend its pleading once as a matter of course within 20 days after it is served, or after that time expires, by leave of court or by written consent of the adverse party. The court should allow a motion to amend unless it has a good reason, such as prejudice to the non-moving party.

In Bishay, the court initially noted that the proceeding were stayed while the former owners challenged the plaintiff’s title in Land Court and all appeals were exhausted, delaying the summary process case for six months. The court went on to examine the amended answer, which included additional underlying facts, three affirmative defenses, four counterclaims, and a request for a jury trial. The court concluded that the absence of the facts from the pleadings did not result in any disadvantage to the defendants, nor did the lack of three affirmative defenses, which related to remedies that were not awarded to the plaintiff. Finally, the court found that the counterclaims asserted by the defendants concerned misconduct by the bank in other forums, and introducing them this late in the case would undoubtedly delay and prejudice the plaintiff. Lastly, the court held that the request for a jury trial was untimely under the civil procedure rules. As a result, the lower court’s ruling against the former owners was upheld.

If you are under a threat of foreclosure or are currently involved in foreclosure proceedings, a knowledgeable property law attorney can advise you of your rights and options. The Massachusetts real estate attorneys at Pulgini & Norton assist individuals in a wide range of residential property issues, including foreclosures, mortgages and closings, land use and zoning disputes, easements, and other property transactions. To schedule a consultation with one of our dedicated attorneys, call Pulgini & Norton at (781) 990-2200 or contact us online.

More Blog Posts:

Massachusetts Appeals Court Reviews Summary Process Action in Foreclosure Dispute, Massachusetts Real Estate Lawyer Blog, published May 23, 2016

Massachusetts Appeals Court Reverses Summary Judgment, Allows Homeowner to Continue Suit Against Mortgage Company, Massachusetts Real Estate Lawyer Blog, published November 17, 2015

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