Massachusetts Homeowner Successfully Reverses Foreclosure Judgment on Appeal

The foreclosure process for a residential mortgage loan can seem daunting, but the borrower may have defenses against foreclosure.  In a May 11, 2018 Massachusetts foreclosure action, the Appeals Court of Massachusetts found in favor of a homeowner fighting against foreclosure.  Ultimately, the court reversed the judgment of the lower court and allowed the plaintiff to continue her defense in the proceedings.

The facts of the case are not unusual in foreclosure actions.  The plaintiff signed the original note payable to the bank in 2007.  A few months later, Fannie Mae purchased a pool of loans from the bank, including the plaintiff’s loan.  After the plaintiff defaulted, the bank sent her a right to cure notice.  In 2009, a mortgage loan servicer for Fannie Mae foreclosed on the plaintiff’s home, exercising the power of sale contained in her mortgage.  The servicer, acting for Fannie Mae, offered the highest bid at the auction.  Fannie Mae purchased the property and then brought an eviction action against the plaintiff in Housing Court.  The plaintiff brought her own action and obtained a preliminary injunction against the eviction, on the basis that the servicer did not hold the mortgage note at the time of the foreclosure sale.  On remand, however, the court entered judgment in favor of Fannie Mae and the loan servicer.  The plaintiff appealed the judgment in the case.

On appeal, the plaintiff presented three arguments for reversal, two of which pertained to the requirements of the right to cure notice.  The provision at issue required the notice to specify the default, the action required to cure the default, a date no earlier than 30 days of the notice by which the default must be cured, and a statement that a failure to cure the default on or before that date may result in acceleration.  The provision also required that the notice must inform the borrower of her right to reinstate after acceleration, and her right to bring a court action to assert any defenses to acceleration and sale.

The appeals court held that while strict compliance with the mortgage terms is required, it is not necessary for the bank to quote, word for word, the language used in the mortgage provision when sending the right to cure notice to the plaintiff.  The court therefore concluded that the notice provided by the bank strictly complied with the requirements of the provision.

The appeals court, however, did agree that a question existed as to whether the bank was authorized to send the right to cure notice in the first place.  Under the terms of the mortgage, the notice is only valid if it is sent by the lender or its agent.  The court found that the evidence offered by the defendants failed to establish conclusively that the bank was an agent of Fannie Mae when it sent the notice.  As a result, the court reversed the judgment against the plaintiff and remanded the matter for further proceedings.

At Pulgini & Norton, our dedicated real estate attorneys can advise Massachusetts homeowners who are concerned about an impending foreclosure or missed mortgage payments.  We have experience in all areas of residential property law as well as the resources to address any legal issue that may arise.  Call our office today at (781) 843-2200 or simply submit our website contact form to schedule a free consultation.

More Blog Posts:

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

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

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