Massachusetts Court Voids Foreclosure for Failure to Comply with Mortgage Provision

In a recent decision, the Appeals Court of Massachusetts addressed the issue of whether Pinti v. Emigrant Mort. Co., which held that the failure to comply strictly with mortgage provisions renders a foreclosure sale void, is extended to cases pending on appeal when that claim was raised and preserved. Resolving the question in favor of the homeowner, the court held that since the homeowner in Aurora Loan Services, LLC v. Murphy specifically preserved and raised the issue on appeal, an exception to the prospective-only rule should be made.

In Aurora Loan Services, LLC, the plaintiff provided notice to the homeowner that his loan was in default and that it would accelerate the loan unless he paid the overdue balance and cured the default within 150 days. After the period passed, the lender formally assigned the mortgage to the plaintiff, which commenced foreclosure proceedings against the homeowner. The homeowner argued in the summary process proceeding that the plaintiff failed to prove its right to possession because it did not strictly comply with the terms of the mortgage, it was not the assignee of the mortgage at the time it sent notice to the homeowner of his right to cure, and the notice itself failed to comply with the mortgage or G.L. c. 244 § 35A.

The Housing Court found that “mortgagee” in relation to G.L. c. 244 § 35A included the plaintiff as a mortgage servicer. It also held that the disputes regarding the plaintiff’s failure to strictly comply with the mortgage or G.L. c. 244 § 35A were not the types of claims that would render the foreclosure void ab initio. On appeal, the homeowner contended that since Massachusetts is a non-judicial foreclosure state without mandated foreclosure proceedings, the plaintiff’s failure to provide notice that the homeowner would need to bring a court action to assert his defense made the foreclosure void, not merely voidable. The homeowner also argued that the holding in Pinti should apply to his case.

The appeals court noted that in Pinti, the Supreme Judicial Court of Massachusetts provided that its decision would be applied prospectively, citing a willingness to apply property law decisions prospectively and the impact the case could otherwise have on the validity of titles. Specifically, the Pinti court stated that the case would apply to foreclosure sales of properties subject to mortgages containing similar provisions, for which the notice of default is sent after the date of the Pinti opinion. However, the court left open whether the decision would apply to any other cases pending appeal.

In Aurora, the homeowner argued that a refusal to extend the Pinti decision to his case, in which the issue had been raised on appeal, would unjustly deprive him of the benefit that similarly situated mortgagers received in Pinti. Since the homeowner’s case had been stayed awaiting the Pinti decision, the court agreed with the homeowner and held that the plaintiff’s foreclosure on the property was void.

An experienced real estate attorney can help protect your rights during foreclosure proceedings and ensure that lenders are obeying the full extent of the law. At the Massachusetts firm of Pulgini & Norton, our real estate attorneys assist individuals in a wide range of residential property matters, including foreclosures, mortgage issues, land disputes, zoning, and other transactions. To discuss your concerns with one of our skilled attorneys, call (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 Supreme Judicial Court Finds in Favor of Homeowners, Voids Foreclosure Sale, Massachusetts Real Estate Lawyer Blog, published July 24, 2015

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