After Much-Awaited Mass. Foreclosure Ruling, Banks and Borrowers Continue with Existing Cases
In the aftermath of a much-awaited Massachusetts Supreme Judicial Court ruling Friday rejecting a “foreclose first, assign later” policy approved by a real estate bar group, both banks and homeowners say they are ready to move forward.
The state’s top court didn’t put a permanent stop to foreclosures but simply requires lenders to own the mortgage on which they are foreclosing, financial industry analysts say. And, they point out, many lenders have been careful to do so after homeowner Antonio Ibanez challenged the case filed against him by U.S. Bank National Association, leading to the landmark ruling Friday against U.S. Bank and another lender, according to Housing Wire.
“The broad implication is you’ve got to dot your i’s and cross your t’s,” attorney Kathleen Cully tells the New York Times, which discusses the ruling in detail. “You need a proper chain of title, and in both of these cases there was a gap in the chain.”
Meanwhile, now that the law is clear, a similar class action by Massachusetts homeowners against two other lenders, U.S. Bancorp and Ally Financial Inc., can proceed, attorney Kevin Costello told Bloomberg.
Still uncertain, it appears, is the extent to which such chain-of-title problems can be cured by starting the foreclosure process over again. While the Ibanez ruling is, of course, of precedential value only in Massachusetts, it is expected to be cited as persuasive authority in other jurisdictions.
Additional and related coverage:
ABAJournal.com: “100s, Maybe 1000s of Foreclosed Mass. Homeowners Find Out They’re Back in the Ballgame Again”
Associated Press: “N.J. Supreme Court intervenes in mortgage foreclosures by six lenders”
Bloomberg: “Banks Lose Pivotal Foreclosure Case in Massachusetts High Court”
Reuters: “The Ibanez Decision: What it means for home owners and investors”
Washington Post: “Massachusetts Supreme Court rules against banks in foreclosure paperwork case”
