In two decisions issued this fall and published this week in Massachusetts Lawyers Weekly, the U.S. District Court in Massachusetts rejected all claims of plaintiffs challenging the foreclosure of their properties.
In Archambault v. Aurora Loan Services, LLC (pdf), the plaintiffs tried to stop the foreclosure of their home by filing suit claiming that the defendant lacked authority to foreclose because (1) an assignment of the mortgage from Mortgage Electronic Registration Systems, Inc. (MERS) to the defendant was invalid because the person who signed the assignment wasn’t authorized to do so, (2) the firm for whom MERS was acting as nominee no longer existed, and (3) the defendant did not hold the promissory note. In a brisk three-page opinion, Judge Richard G. Stearns rejected all of these claims, granted the defendant’s summary judgment motion and dismissed the case. Of particular interest, Judge Stearns ruled that “[i]n Massachusetts, a foreclosing entity must be the current record mortgagee and holder of the mortgage; it need not be the note holder.” For this proposition Judge Stearns cited his own prior opinion in Kelly v. Deutsche Bank National Trust Co. (pdf) as well as the Massachusetts foreclosure statute, M.G.L. c. 244, § 14. But see the contrary holding of Judge Stearns’s District Court colleague, Judge William G. Young, described in this recent post.
Juarez v. U.S. Bank National Association (pdf) was a case brought by a foreclosed property owner some two years after her property was foreclosed. She sought to rescind the foreclosure, restore herself as owner of the property, and collect damages for the defendants’ alleged fraud, violations of several Massachusetts foreclosure statutes, and unfair and deceptive trade practices. The defendants moved to dismiss the case in its entirety, and Judge Denise J. Casper granted that motion. In a detailed 20-page decision, Judge Casper rejected all of the plaintiff’s claims of statutory violations, finding, among other things, that under the Supreme Judicial Court’s decision in U.S. Bank National Association v. Ibanez (pdf), the assignment of the mortgage to the foreclosing mortgagee need not be recorded, and the plaintiff did not have standing to assert noncompliance with the relevant Pooling and Servicing Agreement. Judge Casper also held – in agreement with Judge Stearns and in disagreement with Judge Young – that “[i]n Massachusetts, the foreclosing entity must hold the mortgage only, not both the mortgage and the note.”
Given the many conflicting decisions from our state and federal trial courts on the issue of whether Massachusetts law requires a foreclosing mortgagee to hold both the mortgage and the underlying promissory note, the Supreme Judicial Court’s resolution of that issue early next year in Eaton v. Fannie Mae (see related commentary here) will bring welcome clarity to this important and active area of the law.