Foreclosures

Massachusetts Court: Real Property Liens Survive Bankruptcy Proceedings

Published on: June 24, 2015 | by Pulgini & Norton, LLP

In a recent Massachusetts Supreme Judicial Court case, Christakis v. Jeanne D’Arc Credit Union, Mass. Sup. Jud. Ct. (2015), the court had before it the issue of whether or not judicial liens on real property remain after the owner of the property receives a discharge under Chapter 7 of the Bankruptcy Code.

The plaintiff had filed a complaint in land court to remove judicial liens on the real property she owned. Three creditors had obtained final judgments against the plaintiff owner. The liens on the property, which purportedly arose out of unpaid credit card bills, were finalized prior to the plaintiff’s filing for bankruptcy.

Once the plaintiff filed for bankruptcy, there were various cross motions and motions for summary judgment motions filed. However, only one out of the three creditors responded to the filing.

Appeals Court of Massachusetts Renders Decision for MERS in Mortgage Assignment Case

Published on: April 24, 2015 | by Pulgini & Norton, LLP

In another recent real estate case from the Appeals Court of Massachusetts dealing with mortgage foreclosure, Hoyt v. BAC Home Loan Servicing, L.P., the individuals who mortgaged a property attempted to challenge a foreclosure decision reached in the lower court regarding the legality of assignment and foreclosure.

The homeowners in the case were challenging the assignment of the underlying note that was attached to their mortgage, in addition to the validity of the subsequent foreclosure.

In this very commonly litigated topic right now, the Appeals Court reviewed the record and evidence in the case, and it found that the legal interest in the mortgage may properly be separated from the interest in the debt that it actually secures. It found that the assignment to Mortgage Electronic Registration Systems (MERS) was both valid and legally conveyed, and that it had a proper interest in because it held the record legal title interest in the mortgage when it executed the subsequent assignment.

Massachusetts Attorney General Obtains Nearly $2 Million Judgment in Alleged Predatory Foreclosure Business Lawsuit

Published on: April 15, 2015 | by Pulgini & Norton, LLP

At the end of last month, the Attorney General announced that a court had reached a decision in an alleged predatory foreclosure company that had been conducting business in Massachusetts. The announcement stated that a legal and financial services company was ordered by a judge to pay in excess of $1.9 million to the Commonwealth as a penalty for its purported role in taking advantage of consumers and engaging in the unauthorized practice of law in relation to the massive foreclosure epidemic. The company is also prohibited from soliciting any further business or marketing within the state.

The Attorney General released a statement regarding the case and stating that her office will work against potentially predatory loan modification and foreclosure scams that take place within the state.

Massachusetts Appeals Court Upholds Default Judgment in Real Estate Case

Published on: April 8, 2015 | by Pulgini & Norton, LLP

In a recent opinion entered by the Appeals Court of Massachusetts, Webster Bank v. Ragge, Mass. App. Ct. (2014), the court ruled on a situation involving the enforcement of a default judgment in a real estate foreclosure case.

A default judgment is what happens when a party institutes a legal claim, action, or lawsuit, and the other party in the case, most likely the defendant, does not respond. When there is a failure to respond within the statutorily established period of time, the moving party then files a motion for default judgment. This causes the court to review the relevant moving papers, or motions and attached evidence, and decide whether finding for that party based on the evidence presented is proper. If so, the court enters a default judgment. This allows the party that wins the default judgment to then file something in order to enforce that judgment against the other party.

Massachusetts Appeals Court Sides with Bank in Nantucket Foreclosure Case

Published on: March 26, 2015 | by Pulgini & Norton, LLP

In the recent Massachusetts Appeals Court case, The Bank of NY Mellon Corp v. Wain, 85 Mass. App. Ct. 498 (2014), the court had before it the issue of rightful ownership of a home that had been mortgaged.

In the case, two individuals owned a property that was subjected to a mortgage. The plaintiffs eventually defaulted on the mortgage, at which point the bank foreclosed and bought the property at a foreclosure sale. The bank then filed a lawsuit in order to legally establish proper ownership. The homeowners responded by filing their own claims, and attempted to challenge the foreclosure’s legal validity. The lower court judge ruled in favor of the bank.

When the homeowners purchased the property initially, during the closing, they also signed the relevant mortgage payments. After the homeowners stopped making their payments on time, a separate company sent the homeowners a notice to cure letter, informing them they were in default, and stating how it could be cured. The letter also stated that a failure to cure by a certain date would result in foreclosure.

Massachusetts Appeals Court Sides with MERS in Mortgage Assignment Case

Published on: March 2, 2015 | by Pulgini & Norton, LLP

The Massachusetts Appeals Court recently reached an important decision on the assignability of mortgages by mortgagees. The issue arose out of a foreclosure case in which the plaintiff was attempting to challenge the legality of the process by attacking the underlying mortgage situation.

In the case, Shea v. Federal Nat’l Mortgage Assn., Mass. App, Ct. (2015), the plaintiff had purchased the property at issue in 2005. Then, as part of a refinance of the property, the plaintiff secured a mortgage loan from IndyMac Bank in the amount of $281,600.

Relevant to the case, the mortgage outlined the following. It defined IndyMac, the owner of the debt, as the “Lender.” It identified Mortgage Electronic Registration System, Inc. (MERS), as the mortgagee for purposes of the document.

Massachusetts Mortgage Laws and Avoiding Foreclosure

Published on: January 13, 2015 | by Pulgini & Norton, LLP

The threat of a foreclosure is scary. Whether you have lived in your home for many years, or just a few months, having to leave due to falling behind on payments is something that no one wants to have to do. However, if you receive a foreclosure notice, it is imperative that you do not just ignore it.

Massachusetts law has a very generous grace period for homeowners facing foreclosure, but in order to take full advantage, you have to address the default payments head on. If you are not sure how you want to proceed, but you know that you don’t want to lose your house, hiring an experienced Massachusetts real estate attorney is one way to ensure that your rights will be zealously advocated for.

Mass. G.L. Ch. 244 Section 35A (b) provides that, “a mortgagor of residential property shall have a 150-day right to cure a default of a required payment as provided in the residential mortgage or note secured by the residential property[.]” The default is cured by a full payment of all amounts that are due.

Federal Court Dismisses Lawsuit on Massachusetts Foreclosure Prevention Law

Published on: October 24, 2014 | by Pulgini & Norton, LLP

Massachusetts Attorney General Sues Federal Agencies

In Commonwealth of Massachusetts v Federal Housing Finance Agency et al., a federal judge dismissed a lawsuit brought by Massachusetts Attorney General Martha Coakley in which she accused mortgage finance giants Fannie Mae and Freddie Mac of violating a state law meant to prevent Massachusetts residents from losing their homes to foreclosure.

The Attorney General, in a complaint filed in June in Massachusetts state court in Suffolk County, alleged that Fannie Mae and Freddie Mac, and the Federal HousingFinance Agency (FHFA), as the agencies’ conservator, refused to comply with Massachusetts law, specifically An Act to Prevent Unnecessary and Unreasonable Foreclosures. The Legislature enacted the law to keep Massachusetts residents in their homes rather than allowing them to lose them to foreclosure. It prohibits creditors’ practice of preventing non-profits from buying foreclosed homes solely on the basis that the non-profit will then resell the property to its former owner at a reduced principal balance.

For example, as described in the complaint, one buyback program is Boston Community Capital’s (BCC) “Stabilizing Urban Neighborhoods” Initiative (SUN). SUN buys homes that have been foreclosed and are now owned by the banks holding the defaulted mortgages. The non-profit buys homes at their current market value and then sells the homes to the original homeowners, the only condition being that they can qualify for financing, which the non-profit makes sure is both available and affordable.

Housing Market Forecasted to Increase Around the Country

Published on: June 22, 2012 | by Pulgini & Norton, LLP

Harvard University researchers state that the United States housing market has likely reached bottom and will start to recover this year. Six years ago the country’s housing market fell into a deep slide, but Harvard’s Joint Center for Housing Studies says that the recent increase in home sales paired with the low quantity of available properties and rising rent demonstrates that there is a turnaround in housing prices.

The managing director of Harvard’s Joint Center for Housing Studies, Eric Belsky, said “There are lots of positive indicators here. A floor is beginning to form under home prices.” Boston is viewed more favorable too because the local economy is better and housing values did not decrease as much as other parts of the country. Boston-area home sales increased by 21.5 percent and median prices jumped 5.5 percent in May compared to figured from April, and both of these totals are significantly higher than the United States average.

Alex Coon, the market manager for Redfin (an online brokerage firm) in Boston said, “We are definitely going to be in front of the trend. I think 2012 is going to be the base that the recovery for housing is built on.”

Massachusetts Attorney General Calls for More Loan Modifications for Distressed Homeowners

Published on: April 19, 2012 | by Pulgini & Norton, LLP

A recently released federal report says distressed homeowners in the United States were more likely to stay in their residences after their mortgages were modified. In fact, the Office of the Comptroller of the Currency found nearly three-fourths of homeowners who received a loan modification in 2011 are currently in good standing on their new mortgage. In 2009, only 37 percent of distressed borrowers held onto their homes after a loan adjustment. According to the study, lenders were increasingly willing to reduce the monthly payments for borrowers who were behind on their loans in 2011. This reportedly played a significant role in the higher success rate for mortgage modifications made last year.

The Attorney General of Massachusetts, Martha Coakley, believes the study demonstrates why the Commonwealth of Massachusetts should impose a loan modification requirement on mortgage lenders who attempt to foreclose on residences in the state. Coakley believes loan modifications are good for both borrowers and lenders. She has sponsored Massachusetts legislation that would require mortgage lenders to offer alternatives to homeowners if it would be more profitable for the lender than foreclosing. The requirement would also extend to borrowers with risky subprime loans.

House Bill 1219 is now pending in the Joint Committee on Financial Services. Coakley stated the proposed legislation would halt unnecessary foreclosures in the state and provide a boost to the nation’s faltering economy. According to the Massachusetts Bankers Association, lender requirements included in the bill are too broad. The organization’s Executive Vice President, Kevin Kiley, stated the Bankers Association has strong objections to the bill as it is written. The proposed legislation would purportedly financially punish lenders if they did not achieve a positive outcome.