Failure to Strictly Comply with Mortgage Terms May Be An Affirmative Defense for Massachusetts Homeowners Against Foreclosure

In Massachusetts, a homeowner may have valid legal defenses against the lender in mortgage foreclosure proceedings.  In a December 27, 2018 Massachusetts foreclosure case, the issue was whether the foreclosure on the defendants’ home mortgage was void due to the bank’s failure to strictly comply with the provisions in the mortgage.  The bank appealed the matter after the trial court ruled that the foreclosure was void.

In Massachusetts, the statutory power of sale requires that, upon default, the lender comply with the terms of the mortgage and all foreclosure laws.  In 2015, the Massachusetts Supreme Judicial Court held in Pinti that, to effect a valid foreclosure sale, the lender must strictly comply not only with the terms of the actual power of sale in the mortgage, but also with any pre-foreclosure conditions that are required before exercising the power of sale.  Thus, a lender’s failure to strictly comply with the notice of default provided in the mortgage renders the foreclosure sale void.

The strict compliance requirements of Pinti apply to any foreclosure case in which an issue with the failure to adhere to the mortgage terms was timely and fairly asserted in the trial court, or for any appeal before July 17, 2017.

In the case, the bank sent the defendants a notice of default by certified mail in October of 2014.  Ultimately, the bank foreclosed on the mortgage by exercising the statutory power of sale, and recorded the foreclosure deed in July of 2016.  A trial was held on July 13, 2017.  The trial court concluded that the bank did not present evidence of its strict compliance to the mortgage terms prior to the foreclosure sale, and found that, pursuant to Pinti, the foreclosure was void.

On appeal, the court clarified that in a summary process action for possession after foreclosure by sale, the lender is not required to prove compliance with Pinti.  Rather, the lender is only required to show that it obtained a deed to the property and that the deed and affidavit of sale, showing compliance with statutory foreclosure requirements, were recorded.  The court further held that any argument that the lender failed to strictly comply with the mortgage requirements is an affirmative defense, and as such, must be raised in a timely and fair manner by the foreclosed party facing eviction.  In the instant case, because the defendants had not specifically alleged that the lender’s notice for default failed to comply with the terms of the mortgage, the court found that they had not properly asserted the defense.  The appeals court then remanded the case for a new trial.

If you need guidance regarding your mortgage or foreclosure proceedings, the Massachusetts real estate lawyers at Pulgini & Norton can assist you.  We handle a wide range of legal matters concerning residential property, including financing, home purchases and sales, zoning variances, and more.  Request a free consultation with one of our experienced attorneys by calling (781) 843-2200 or completing our website contact form.

More Blog Posts:

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