The Supreme Judicial Court (SJC) this morning issued its decision in Bank of New York v. Bailey (pdf) (see our prior commentary here). In this case the defendant homeowner sought to stave off eviction from his Boston home after a foreclosure initiated by Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for the lender, and consummated by Bank of New York (BNY), which had taken an assignment of the note and mortgage. The homeowner asserted that he didn’t receive proper notice of the foreclosure. The Housing Court ruled that it didn’t have jurisdiction to consider that defense, and granted BNY’s motion for summary judgment for possession.
The SJC granted direct appellate review and today reversed that decision, holding that, in a summary process (eviction) case following a foreclosure, the Housing Court does have jurisdiction to consider (and therefore must consider) the homeowner’s defense that the plaintiff’s title is invalid because it was acquired through a foreclosure sale that was itself invalid. Because BNY did not demonstrate its entitlement to possession, the SJC remanded the case to the Housing Court for further proceedings.
This important decision makes clear that, in an eviction proceeding following a foreclosure, the Housing Court has jurisdiction to consider title-based defenses, including not only (as here) defenses based on improper notice, but – presumably – the full range of Ibanez-type defenses based on the foreclosing entity’s lack of a right to foreclose due to gaps in the chain of assignments, or other flaws in the paper trail leading up to the foreclosure.