In a new opinion, the Appeals Court of Massachusetts reviewed a foreclosure case involving a summary process action brought against the mortgagor-occupant. In Gold Star Homes, LLC v. Darbouze, 89 Mass. App. Ct. 374 (2016), the defendant and mortgagor initially filed a complaint with the Land Court against the plaintiff and purchaser of the property, alleging unlawful foreclosure. The plaintiff then brought a summary process action against the defendant in the Housing Court. The lower court ruled in favor of the plaintiff on its summary process action, despite the defendant’s pending suit against it.
The purpose of summary process is to enable the holder of the legal title of property to gain possession of the premises wrongfully withheld. Legal title is established in summary process by proof that the title was acquired strictly according to the power of sale provided in the mortgage, and that alone is subject to challenge. If there are other grounds to set aside the foreclosure, the defendant must seek affirmative relief in equity.
On appeal, the defendant contended that the judge should not have proceeded on the plaintiff’s summary process action while his related, prior action sought a declaration invalidating the foreclosure sale. The appeals court disagreed, explaining that the relief sought by the plaintiff in the Housing Court, i.e., summary process and eviction, was not available as a counterclaim in the defendant’s Land Court action. The court also noted that the defendant could have asked the Land Court to stay her eviction pending the outcome of its decision, but she did not. As a result, and since the trial in the Housing Court was fair, the appeals court held that the lower court did not err by proceeding with the trial.
The defendant also argued that the judge erred in granting summary process because the entity that conducted the foreclosure sale was not the mortgage holder. However, in reviewing the evidence of record, the appeals court determined that the entity named in the mortgage was, in fact, the mortgagee at all relevant times. Accordingly, the court concluded that the mortgagee in the case also had authority to exercise the power of sale.
Finally, the defendant argued that the post-foreclosure conveyance of the property to the plaintiff by foreclosure deed was ineffective. The appeals court disagreed, finding that when the mortgagee completed the exercise of the power of sale, the property was no longer mortgaged land, so the mortgage no longer existed. When the plaintiff accepted and recorded the deed and paid the balance of the purchase price, any remaining property interest by the mortgagee was extinguished. The plaintiff was the owner of the property in fee simple when it initiated the summary process action to evict the defendant. The Housing Court decision was thus affirmed by the appeals court in its entirety.
The Massachusetts real estate attorneys at Pulgini & Norton provide legal guidance to individuals in a wide variety of residential property matters, including foreclosures, mortgages and closings, land use and zoning disputes, easements, and many other transactions. To arrange a consultation with one of our knowledgeable attorneys, call Pulgini & Norton at (781) 990-2200 or contact us online.
More Blog Posts:
Massachusetts Appeals Court Reverses Summary Judgment, Allows Homeowner to Continue Suit Against Mortgage Company, Massachusetts Real Estate Lawyer Blog, published November 17, 2015
Massachusetts Governor Signs Act Clearing Title To Foreclosed Properties, Massachusetts Real Estate Lawyer Blog, published January 4, 2016