In the recent Massachusetts Appeals Court case, The Bank of NY Mellon Corp v. Wain, 85 Mass. App. Ct. 498 (2014), the court had before it the issue of rightful ownership of a home that had been mortgaged.
In the case, two individuals owned a property that was subjected to a mortgage. The plaintiffs eventually defaulted on the mortgage, at which point the bank foreclosed and bought the property at a foreclosure sale. The bank then filed a lawsuit in order to legally establish proper ownership. The homeowners responded by filing their own claims, and attempted to challenge the foreclosure’s legal validity. The lower court judge ruled in favor of the bank.
When the homeowners purchased the property initially, during the closing, they also signed the relevant mortgage payments. After the homeowners stopped making their payments on time, a separate company sent the homeowners a notice to cure letter, informing them they were in default, and stating how it could be cured. The letter also stated that a failure to cure by a certain date would result in foreclosure.
The homeowners alleged that the notice to cure letter did not completely comply with the relevant Massachusetts laws. The appeals court found that while a mortgagor may challenge the cure letter’s validity either by enjoining a foreclosure, or after a foreclosure has already taken place, it is not enough to merely show noncompliance with the statute. Rather, in order to defeat the foreclosure, the mortgagor “must prove that the violation  rendered the foreclosure so fundamentally unfair that [the individual] is entitled to affirmative equitable relief…'” Equitable relief is a real estate remedy whereby the court does what it thinks is fair in the face of a potentially unfair legal result.
The appeals court found that the homeowners did not meet the burden of demonstrating that the foreclosure was so fundamentally unfair that they were entitled to equitable relief, to set aside the foreclosure sale.
Next, the appeals court turned to the homeowners’ challenge regarding the assignment of the mortgage to the bank that conducted the foreclosure sale.
Regarding the challenge to the validity of the assignment itself, the court found that because the assignment complied with the legal relevant requirements on its face, it was proper, and therefore the homeowner’s lacked standing to challenge it.
The last argument the homeowners alleged was under a theory of law called try title, whereby they urged the bank to bring an action in order to determine whether they held superior rights to the title. The plaintiffs believed that they would prevail against the bank in such an action. The trial court skirted the issue, finding that the bank had demonstrated its right to the property, and the appeals court agreed.
Therefore, the granting of summary judgment in favor of the bank was affirmed.
Whatever your needs, the real estate attorneys at Pulgini & Norton, LLP are experienced in handling all of the potential issues that can arise during the process of buying or renting a home or property in Massachusetts. We represent clients in Brookline, Lowell, and Malden, among other Massachusetts communities. Call us today at 781-843-2200 or contact us online for a consultation.
More Blog Posts:
Massachusetts Appeals Court Upholds ATB Decision in Tax Abatement Case, Massachusetts Real Estate Lawyer Blog, published March 19, 2015
Settlement Reached in Massachusetts Family Discrimination Housing Case, Massachusetts Real Estate Lawyer Blog, published March 12, 2015