Massachusetts Court Rules Property Remains Subject to Unpaid Mortgage Despite Passage of Time

In most cases, a mortgage on property must be paid back to the lender according to an agreed upon schedule.  In an August 2, 2017 Massachusetts real estate case before the Land Court, the parties involved did not have a traditional bank mortgage arrangement.  The plaintiff had filed a petition to amend the title to his property by expunging the recorded mortgage.  The plaintiff argued that a mortgage he granted to his brother, the defendant, had become obsolete and unenforceable by the passage of time.  The defendant argued that the limitations period had not yet passed, and therefore, he retained the right to foreclose on the mortgage.

In 1994, the plaintiff signed a promissory note and granted a mortgage to the defendant in the amount of $275,000.  The mortgage was recorded and noted on the certificate of title.  Although the original promissory note was lost, the mortgage incorporated the terms of the note by reference.  In 1996, the parties modified the loan by extending the remaining principle sum of $150,000, but they did not record the document.

A mortgage is an interest in real property that secures a lender’s right to repayment, such that should the debtor fail to timely repay the debt or otherwise default on his obligations, the creditor can foreclose on the mortgage and recover.  A promissory note and mortgage co-exist, providing the lender with a double remedy, one upon his deed, to recover the land, another upon the note, to recover a judgment and execution for the debt.  The mortgage remains in full force until the debt shall be paid.

Under Massachusetts law, a mortgage cannot be enforced after 35 years from the date of the recording of a mortgage, if no mortgage term is stated.  Mortgages with a stated term or maturity date cannot be enforced five years from the expiration of the term, unless an extension or acknowledgment is recorded before it expires.  The mortgage in the case had incorporated the due date of the note by reference, but it did not state the due date for the original note or the modified due date anywhere on the face of the mortgage, and neither date was ascertainable as a matter of record title.  As a result, the Land Court held that enforcement of the mortgage was subject to the 35-year limitations period.

The plaintiff next argued that the defendant could no longer foreclose on the mortgage because he is barred from collecting the underlying debt by the statute of limitations.  The Land Court explained that although the defendant would be barred by the statute of limitations from collecting on the promissory note in a contract action, the mortgage remains enforceable, for the debt has not been paid.  In addition, the defendant would not be precluded from foreclosing on the mortgage simply because the original promissory note was lost, since he may rely on a lost note affidavit as evidence of possession of the note.  Accordingly, the plaintiff’s action to remove the mortgage from his title was dismissed.

At Pulgini & Norton, our Massachusetts property lawyers take care of legal matters related to residential real estate.  We can advise individuals on home purchase and sale agreements, closings, mortgages and refinancing, land use disputes, and other issues affecting your property.  Schedule an appointment with one of our experienced associates by calling Pulgini & Norton at (781) 843-2200 or contacting us online.

More Blog Posts:

Massachusetts Court Reverses Deficiency Judgment Against Defendants Who Lost Their Home in Foreclosure, Massachusetts Real Estate Lawyer Blog, published May 8, 2017

Massachusetts Land Court Dismisses Bank’s Action Against Defendant to Reform Mortgage, Massachusetts Real Estate Lawyer Blog, published January 2, 2017

Contact Information