Massachusetts Supreme Judicial Court Stops Foreclosing Banks
The Massachusetts SJC ruled Friday that banks cannot foreclose on Massachusetts homes without proper paperwork. The banks must show a proper chain of title before being able to complete a foreclosure and eviction in Massachusetts. Massachusetts bankruptcy and consumer lawyers need to properly advise clients in accordance with this ruling.
In the cases at bar the plaintiff banks, Wells Fargo and US Bankcorp, filed foreclosure actions stating that they owned mortgages taken out by Antonio Ibanez, for $103,500 and Mark and Tammy LaRace for $129,000, in 2005. The mortgages for both homes were two of those notorious adjustable rate subprime mortgages. At some point in time they were unable to pay for their mortgages and the foreclosure began in 2007 and the banks bought the homes. In March 2009, The Land Court, however, upon examining the actual documentation, found against the banks, saying that they did not own the mortgages when they filed the foreclosure. Further, the Court said that the banks failed to assign the Note when the finally did assign the Mortgages. The Massachusetts SJC agreed. In a concurring opinion by Justice Cordy, he found that the banks used “utter carelessness” in documenting title to homes.
The Massachusetts SJC ruling drove the stocks price of Wells Fargo down 2% and US Bancorp down .76%. The bank stock index was down .9% for the day, Friday, January 7. Most importantly for Massachusetts consumers, however, will be the reaction by the banks and mortgage holding companies in their rush to foreclose.