When faced with an impending mortgage foreclosure, many homeowners may have defenses or other legal options that could result in a more favorable outcome. The Appeals Court of Massachusetts recently reviewed a case on March 31, 2017 that involved defendants who had lost their home to foreclosure.
At the foreclosure sale in 2013, the high bid did not cover all of the defendants’ remaining debt on the mortgage, leaving a deficiency. The defendants had been paying the premium for a mortgage insurance policy, as required by their original lender. The insurer, the plaintiff in the case, sued the defendants to recover the deficiency. The plaintiff moved for summary judgment on a contractual subrogation theory. The lower court granted the motion and entered a judgment for approximately $41,000 against the defendants. The defendants appealed the judgment to the higher court.
On appeal, the defendants contended that the lower court erred in entering its judgment because there was a factual dispute as to whether the plaintiff actually paid its insured and acquired any contractual subrogation rights against the defendants. In support of their argument, the defendants alleged there was no evidence that the plaintiff complied with two provisions of the insurance contract relevant to subrogation.