Ibanez - Appeal Supreme Court

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SUPREME JUDICIAL COURT
FOR THE COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
NOS. 2010-P-0123 & 2010-P-0124
U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE FOR THE STRUCTURED ASSET SECURITIES
CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
2006Z,
PLAINTIFF/APPELLANT,
v.
ANTONIO IBANEZ,
DEFENDANT/APPELLEE.
WELLS FARGO BANK, N .A.,
AS TRUSTEE FOR ABFC 2005-0PT 1 TRUST, ABFC ASSET
BACKED CERTIFICATES SERIES 2005-0PT 1,
PLAINTIFF/APPELLANT,
v.
MARK A. LARACE M'"D TAMMY L. LARACE,
DEFENDANTS/APPELLEES.
ON APPEAL FROM A JUDGMENT OF
THE LAND COURT
CONSOLIDATED APPLICATION OF THE APPELLANTS
FOR DIRECT APPELLATE REVIEW
R. Bruce Allensworth (BBO#015820)
Phoebe S. winder (BBO#567103)
Andrew C. Glass (BBO#638362)
Robert w. Sparkes, III (BBO#663626)
K&L GATES LLP
State Street Financial Center
One Lincoln Street
Boston, Massachusetts 02111-2950
617.261.3100 (telephone)
Attorneys for Appellants
iffs s, u.s. Nat
As s Asset ion, as Trustee
Corporation Pass-Through
Certif
Wells
es 2006-Z ("U.S. Bank, as Trustee")
, N.A., as Trustee
OPTI Trust, ABFC Asset Certificates
2005 ( "WeI Fargo, as Trustee")
Court
capti
1ants") ,
t
ly request
review of
to Mass. Gen. L.
§ 10(a) Mass. R. App. P. 11.1
present
Court
quest
losure law that
Ii
the
new I that
ce
of
, the orders call
a 's t
which
serves to
question the
her
- 2
ABFC 2005
the
. 21
is
.J..,ULlJo,,-t on
of
a
a
foreclosure sale has occurred at any time in the
history of the property's conveyance.
Accordingly, these appeals present novel legal
issues of such public interest that justice requires a
final determination by this Court. The Court,
therefore, should grant Appellants' application for
direct appellate review.
I. STATEMENT OF RELEVANT FACTS
The appeals concern foreclosures on two
properties that secured loans as to which the
borrowers, Defendants/Appellees here, defaulted.
A. The Larace Mortgage Loan
On or about May 19, 2005, Defendants/Appellees
Mark A. Larace and Tammy L. Larace (the "Laraces")
obtained an adjustable rate mortgage loan in the
amount of $129,000.00 from Option One Mortgage
Corporation ("Option One"). The note was secured by
real property located at 6 Brookburn Street in
Springfield, Massachusetts.
Subsequently, the Larace mortgage loan was pooled
with other loans and placed ln a securitization trust
for which Wells Fargo acted as trustee. The Pooling
and Servicing Agreement ("Larace PSA") assigned all
interest in the Larace note and mortgage to Wells
- 3 -
Fargo acting in its capacity as trustee for the
securitization trust. Specifically, the PSA provided:
The Depositor [Asset Backed Funding Corporation),
concurrently with the execution and delivery [of
the Pooling and Servicing Agreement), does hereby
transfer, assign, set over and otherwise convey
to the Trustee [Welis Fargo], without recourse
for the benefit of the Certificate holders all
the right, title and interest of the Depositor,
including any security interest therein in
and to. . each mortgage loan identified [by
the Agreement] .
Larace PSA at Art. II, § 2.01 (emphasis added).
Pursuant to the Larace PSA, Wells Fargo, as
Trustee had possession, at all relevant times, of the
original Larace note (endorsed in blank), the original
Larace mortgage, and an assignment of mortgage in
blank.
2
On or before April 2007, the Laraces defaulted on
their mortgage loan. Thereafter, in April 2007, Wells
Fargo, as Trustee commenced foreclosure proceedings on
the mortgaged property. Pursuant to Mass. Gen. L. ch.
244, § 14, a "Notice of Mortgagee's Sale of Real
Estate" was published in The Boston Globe on the
requisite number of occasions. Wells Fargo, as
Trustee sent similar notices to the Laraces and all
2
An assignment of mortgage in
which the assignment is completed
of the assignee is left blank.
- 4 -
blank is one in
except that the name
ies an t
The Is , as Trustee as
s
On
at auct
osure.
5, 2007,
to Wells , as Trustee
of $120,397.03.
was s
the amount
The Laraces never contes the notice
or any of
No other ever came
at time or at any s ,to
contest Is , as Trustee's t in note
On or 7, 2008, on One executed a
rmatory assignment of Larace t mortgage
from itself to Is , as Trustee, ef as
of April 18, 2007, a e to the issuance of
the losure
ass was th Hampden
of on May 12, 2008. On 15, 2008,
losure were
of
B.
On or about December 1, 2005, /Appel
11 )
an us rate
- 5
mortgage loan in the amount of $103,500.00 from Rose
Mortgage, Inc. The note was secured by a mortgage on
real property located at 20 Crosby Street in
Springfield, Massachusetts. Rose Mortgage, Inc. then
assigned the note and mortgage to Option One.
Subsequently, the Ibanez mortgage loan was pooled
with other loans and placed in a securitization trust
for which U.S. Bank acted as trustee. The Private
placement Memorandum ("Ibanez PPM") evidences an
assignment of all interest in the Ibanez note and
mortgage to U.S. Bank acting in its capacity as
trustee for the securitization trust. Specifically,
the Ibanez PPM provided:
The Mortgage Loans will be assigned by Depositor
to the Trustee . Each transfer of a
Mortgage Loan from the Seller to the Depositor
and from the Depositor to the Trustee will be
intended to be a sale of that Mortgage Loan and
will be reflected as such in the Sale and
Assignment Agreement and the Trust Agreement .
. With respect to certain Servicers, it is
expected that the mortgages or assignments of
mortgage with respect to each Mortgage Loan will
have been recorded in the name of an agent on
behalf of the holder of the related mortgage
note. In that case, no mortgage assignment in
favor of the Trustee will be required to be
prepared, delivered or recorded. Instead, the
Servicer will be required to take all actions as
are necessary to cause the Trustee to be shown as
the owner of the related Mortgage Loan on the
records of the agent for purposes of the system
of recording transfers of beneficial ownership of
mortgages maintained by the agent.
- 6 -
Ibanez PPM at 119
pursuant to
, as Trustee
t
is
s
possess
} .
, u.s.
I at
note ( in
) , mortgage, an
assi
On or
"Notice of
publi
of occas
no to
t in
1 2007, on his
ter, U.S. , as Trustee
losure on
Pursuant to Mass. Gen. L. . 244, § 14, a
's e Estate" was
Boston obe on site
U.S. Bank, as Trustee sent s
1 ies holding an
lis u.s.
, as Trustee as the f
On mor property was
at auct
5, 20
to U.S. as Trustee for the amount of
$94,350.00.
never contested of osure
or t No
party ever came at
or at any time s , to contest U.S
Bank, as Trustee's t note
7
On May 23, 2008, the foreclosure deed and related
documents were recorded with the Hampden County
Registry of Deeds. On or about September 2, 2008,
American Home Mortgage Servicing, Inc. ("AHMSI")
executed a confirmatory assignment of the Ibanez
mortgage to U.S. Bank, as Trustee. That confirmatory
assignment was recorded with the Hampden County
Registry of Deeds on September 11, 2008.
II. STATEMENT OF PRIOR PROCEEDINGS
3
A. Appellants' Land Court Actions And The
Borrowers' Default
Well after the foreclosure sales at issue here, a
question arose within the title insurance industry in
Massachusetts as to whether the use of The Boston
Globe for pUblication of foreclosure notices with
respect to real property located in Springfield,
Massachusetts, satisfied the notice provision of Mass.
Gen. L. ch. 244, § 14.4
To resolve this question with respect to the
subject properties, in the fall of 2008, Appellants
3
Pursuant to Mass. R. App. P. 11(b), certified
copies of the Land Court docket sheets are attached
hereto at Tabs 1 and 2 of the Addendum.
4
While The Boston Globe is in circulation in
Springfield, The Springfield Republican has a wider
circulation in that area.
- 8 -
fil aints Land Court, each
seeking a 's
or mortgagors' rights, t t the
were ext shed at foreclosure sale,
(2) no cl sted on tit to , and
( 3 ) title to fee
simple. one issue
, whether The Boston Globe was a of
c on in the area
es of satis notice ion of Mass.
Gen. L. ch. 244, § 14.
Al ce of process,
ther to complaints,
lants for of fault j t
lees.
Because the Ibanez Larace ons raised
same I issue surrounding adequacy
publ on The Boston Globe, Land Court
idated act pre-
5
Sua Court a new
5
Land Court also
th a
- 9
issue not presented complaint action.
fi Land Court queried
Appellants were legal "
/I
the respec
at
fore, notices e
ied th Mass. Gen. L. . 2 ,§ 14.
6
Court reques ef on s issue,
for
6
7
lants connec on wi r mot
t j t lees.
B. I
On March 26, 2009,
and
t
Court
, compl
on of the ect
Order on
t Judgment.
A copy of Mass. Gen. L.
at 7 the
A copy of the Court's
ffs' Motions
26, 2009
- 10
Court issued a
of
("Ibanez 11).7
the ques
notices in
, Motions
244, §
3
Boston Globe sfi rements Mass. Gen.
L. 244, § 14. Land Court,
to f ( 1 ) nei val
assi time icat of
notices or at the t of the e,
(2 ) the losure notices 1
\\ II
the (3 )
ces were 1 ent Mass. Gen. L.
244, § Put way! the Court
s to
at issue.
As a Court not
mot t j sua
, found
s'
wi filed
j
c.
On
vacate J
, but tantial
II
14, 2009,
Order denying
s lar, motions to vacate
Court i
lants
f
a
to
firming its pr
J
- 11
( "Ibanez II") . 8 Notwi ths tanding Appellants' evidence
that at the time of the foreclosures, Appellants
possessed the respective original notes (endorsed in
blank), the original mortgages, the assignments of
mortgage in blank, and securitization documents
assigning all interests in the respective notes and
mortgages to Appellants, the Land Court found that
Appellants were not the "holders" of the respective
mortgages. The Land Court held that although an
assignment of mortgage need not be recorded, an entity
becomes the "holder" of a mortgage for the purposes of
satisfying the notice requirements of Mass. Gen. L.
ch. 244, § 14, only where the assignment is "in
recordable form" and expressly identifies that entity
as the assignee.
On October 30, 2009, both U.S. Bank, as Trustee
and Wells Fargo, as Trustee filed Notices of Appeal
from the Land Court's two memoranda and orders and the
Land Court's ultimate judgment against both entities.
9
8
A copy of the Land Court's Memorandum and Order
on Plaintiffs' Motions to Vacate Judgments dated
October 14, 2009 (Ibanez II) is attached hereto at Tab
4 to the Addendum.
9
U.S. Bank, as Trustee's Notice of Appeal is
attached hereto at Tab 5 to the Addendum. Wells Fargo,
as Trustee's Notice of Appeal is attached hereto at
Tab 6 to the Addendum.
- 12 -
III. LAW PRESENTED FOR APPEAL
11
A.
B.
primary issues of that the
e on
power
1.
2.
3 .
4 .
5.
are as lows:
Court erred rul
ass of
not act to ass
ass
and thus did not
on to
the
notice
Gen. L. ch. 244,
any
the record;
Court's
Court erred in
of a
er
e;
did
Larace
of Mass.
erroneousi
ing
not ratify
- 13 -
C. Whether the Land Court erred by not limiting
its rulings to prospective application only,
where it failed to take into consideration
Title Standard No. 58 of the Real Estate Bar
Association for Massachusetts and the far-
reaching consequences of the retroactive
application of the Land Court's ruling on
numerous titles to real property in
Massachusetts; and
D. Whether the Land Court abused its discretion
by entering judgment sua sponte against
Appellants.
Pursuant to Rule 11(b) (4) of the Massachusetts
Rules of Appellate Procedure, Appellants certify that
they have raised and preserved the issues listed above
in the Land Court.
IV. ARGUMENT.
Appellants had standing to invoke the statutory
power of sale and to provide notice under Mass . Gen.
L. ch. 244, § 14, because they were holders of the
notes and possessors of the original mortgages,
possessors of assignments of mortgage in blank, and
assignees pursuant to the terms of the securitization
documents. These documents, taken alone and together,
acted to assign the mortgages, and thereby conveyed
authority to foreclose. Neither the Land Court's
hypertechnical interpretation of Mass. Gen. L. ch.
244, § 14, nor its improper creation of hypothetical
prejudice should be permitted to alter that authority.
- 14 -
Moreover, after the foreclosure sales, Appellants
recorded confirmatory assignments - a long-standing
practice in Massachusetts that comports with the Real
Estate Bar Association's Title Standard No. 58 and
that ratified Appellants' ownership interests in the
subject loans.
The Land Court's erroneous rulings have created a
serious cloud on property titles throughout
Massachusetts and on foreclosure procedures as a
whole, and they should not stand.
A. Appellants Had Standing To IIlvoke The
Statutory Power Of Sale And Issue Notice
Under Mass. Gen. L. ch. 244, § 14
1. The Land court Erred In Ruling That The
Assignments Of Mortgage In Blank Did
Not Assign The Mortgages to Appellants
The Land Court held that Appellants' assignments
in blank were ineffective to assign the mortgages
because "[o]ne can become the 'holder of the mortgage'
. only by a writing satisfying the statute of
frauds . in recordable form." Ibanez I, Tab 3 to
Addendum, at 11 n.19.
Massachusetts Law, however, does not require a
party to possess an assignment in recordable form as a
prerequisite to the exercise of the power of sale.
Instead, the statute governing foreclosure notices,
- 15 -
Mass. Gen. L. ch. 244, § 14, II [t]he
II or
may " 1
"ass
Simi
acts authori
statute
into
power may
does not
power of sale"
or by
power of sale,
Larace
by an
an ass
to so. Mass. Gen. L. . 183, § 21.
, while statute, Mass.
Gen. L. ch. 183, § 6C, states to
the name of , an ass should
ass , it o states that II [f]ailure to comply
s 1 not the i ty
of ass of a mortgage.
It
statute,
an ass may possess a
ass of mortgage even if
that document not in
Moreover, Court's
the ass wi Statute
an ass be
II
s the par to
some person him lawfully
"
Mass. Gen. L. 259, § 1 (4) .
Court in upon ssey,
- 16 -
327 Mass. 217 (1951) and Macurda v. Fuller, 225 Mass.
341 (1916), for the position that a deed in fee simple
is invalid if it is executed with the grantee's name
left blank. Both cases involved real estate deeds
conveyed through overt acts of fraud. There is no
suggestion of fraud here. In any event, a deed
remains valid if "alterations are made by the
grantor's direction" or "the filling of the blanks is
not material to the validity of the instrument and
does not alter its legal tenor and effect." Eno &
Hovey, 28 Massachusetts Practice § 4.50 (4
th
ed. 2008);
phelps v. Sullivan, 140 Mass. 36, 37 (1885) (assignment
of mortgage valid where grantor executed assignment in
blank and orally authorized son to fill in the name of
purchaser, once found, as grantee). Both conditions
are true here, and nothing in the law requires an
assignment identify the assignee by name to be valid.
2. The Land Court Erred In Ruling That The
Securitization Agreements Did Not
Assign The Mortgages to Appellants
The provisions contained in the Larace PSA and
the Ibanez PPM (see supra) themselves act to assign
the mortgages to Appellants, and at least one court
applying Massachusetts law has found as much. In re
Samuels, 415 B.R. 8, 18 (Bankr. D. Mass. 2009) ("The
- 17 -
[Pooling and Servicing Agreement] itself . . served
as a written assignment of the designated mortgage
loans, including the mortgages themselves."). The
Larace PSA and the Ibanez PPM satisfy the Land Court's
own erroneous requirements for a valid assignment.
Among other things, these documents identify
Appellants as assignees and contain language of
conveyance directed expressly to the mortgages that
comprise the securitization trusts. These documents
assign and convey the mortgages from the assignors to
Appellants and, thus, conferred the authority to
exercise the power of sale under those mortgages. See
Lamson & Co. v. Abrams, 305 Mass. 238, 244 (1940) ("The
interest of anyone in an existing mortgage . is
not confined to the record title.").
3. ·The Land Court Erred In Ruling That
Appellants' Possession Of The Original
Loan Documents Did Not Provide
Authority To Invoke The Power Of Sale
Courts have found that the exercise of the power
of sale is not limited to the mortgage holder; it may
be exercised by those possessing other "sufficient
financial interest[s]." Saffran v. Novastar Mort.,
Inc., No. 4:07-cv-40257-PBS, Order re: Emergency
Motion for Stay Pending Appeal at 5-6 (D. Mass. Oct.
- 18 -
18, 2007);
10
see
13 9 F. 3 d 59,
62 ( Cir. 1998) lose found
loan "cl that f
retain authority to
elf) .
At losure not 1
poss
"
fi f
til
the two to exerc
power of held
note, provided wi an e
t the
in
mortgage and the
ty an assignment of that
to
See
t Nat'l Bank of Hoosac
7 Mass. App. Ct. 790, 796 (1979).
lants also possessed
original assi of
, coupled th
trate
vest
e.
10
A
8
ln
No
lants authori
party come
s' ownership or to
- 19
and
in blank. e
ti on
the and
to invoke power
to challenge
a t
possess 1 of
is at
indicia of ownership of the mortgages, and the Land
Court erred in ruling otherwise.
4. The Land Court's Interpretation Of The
Notice Requirements Of Mass. Gen. L.
Ch. 244, § 14, Was Erroneous
Contrary to the Land Court's rulings, where a
foreclosure sale is conducted with reasonable
diligence and performed in a commercially reasonable
manner, without evidence of fraud, misconduct, or
prejudice, there is no reason to invalidate the sale.
See States Res. Corp. v. The Architectural Team, Inc.,
433 F.3d 73, 81 (1
st
Cir. 2005). The proper focus when
considering the notice requirements of Mass. Gen. L.
Ch. 244, § 14, is on whether the notice provided the
mortgagor with sufficient information to protect her
interests and whether any error actually prejudiced
the mortgagor's rights. Several recent court
decisions have interpreted the requirements of
Section 14, and the similar provisions of Mass. Gen.
L. ch. 244, § 17B, in accordance with these
principles. See Fed. Deposit Ins. Corp. v. Kefalas,
62 Mass. App. Ct. 1121, at *1 (2005) (unpublished
disposition) ("we fail to see why the change in name
was significant;" "[tJhe defendant's assertion that
the difference in name may have prejudiced the outcome
- 20 -
of the sale is entirely speculative"); Tarvezian v.
Debral Realty, No. 921437, 1996 WL 1249891, at *4
(Mass. Super. Ct. Sept. 27, 1996) ("This court will not
read the statute in . . a formalistic,
hypertechnica1 manner, but rather will construe it ln
its practical application, purpose and effect.") .11
Here, the record contains no indication that
either mortgagor suffered prejudice as a result of the
published notices. The notices identified the party
seeking to exercise the power of sale, the holder of
an assignment of mortgage in blank, the assignee under
the securitization documents, and the holder of the
underlying note. Nothing in the factual record
suggests that the manner in which Appellants were
named in the published notices had any impact on the
transactions or the accepted bids, or caused harm to
the defaulted mortgagors.
12
The Land Court's
11
See also Nichols, 139 F.3d at 61-62("[t]he trust
has not shown any respect in which it has been
disadvantaged by having Cadle, rather than Foothill,
give notice and conduct the foreclosure"); Bank of New
York v. Apollos, No. 08-ADMS-10045, 2009 WL 1111198,
at *1-2 (Mass. App. Div. Feb. 27, 2009) (upholding
notice where "[tJhere is no suggestion that the sale
was conducted in a commercially unreasonable manner") .
12 In addition, Appellees had notice of the identity
of the servicers of their mortgage loans under the
Real Estate Settlement Procedures Act, 12 U.S.C.
- 21 -
speculation to the contrary is not sufficient to
warrant the voiding of the two foreclosure sales.
In strictly construing Mass. Gen. L. c. 244,
§ 14, the Land Court relied heavily on Roche v.
Farnsworth, 106 Mass. 509 (1871) and Bottomly v.
Kabachnick, 13 Mass. App. Ct. 480 (1982). This was
error. In Roche, the notice listed only the original
mortgagor and mortgagee, neither of which maintained
an interest in the property. This Court held that the
notice should list what is being sold, who is doing
the selling, and who is advertising the foreclosure
sale. See Roche, 106 Mass. at 513. The Appeals Court
in Bottomly stretched Roche by finding a notice, which
did not name the holder or the party conducting the
foreclosure sale, defective "because it failed to
identify the holder of the mortgage." Bottomly, 13
Mass. App. Ct. at 483-84. While the word choice in
Bottomly suggests a bright-line rule, its facts
indicate a simpler holding - that the notice must
identify the party purporting to exercise the power of
sale and to issue notice. The notices issued in
§ 2605(e), and had access to information concerning
the holders of their notes and mortgages under the
Truth in Lending Act, 15 U.S.C. § 1641(f) (2).
- 22 -
connect with Ibanez Larace
satisfi s , and Court's
s error.
13
B.
The Land Court
assi not act to fy ass
as between assignors
Appel An ass that in e
and after forec e is a
con assignment, which es of
t in the and its
note and s zation
See . v. Trustees of Boston
., 425 Mass. I, 18
..::....;;..=-=-
997); In re , 20
==--==-:::..-=--:.:;;:.:.=-=-=-
WL
2 2121, at *11; In re 417 B.R. 0, 148 50
--------
(Bankr. D. Mass. 2009).
This is consistent th indus
ce in etts, as set forth REBA Title
Standard No. 58:
13
To the extent that Court ied upon
e notice appended to Mass. Gen. L. ch. 244,
§ 14, finding that
ts use
- 23 -
A title is not defective by reason of:
[t]he recording of an Assignment of Mortgage
executed either prior, or subsequent, to
foreclosure where said Mortgage has been
foreclosed, of record by the Assignee.
REBA Title Standard No. 58, infra. The confirmatory
assignments executed and recorded after the sales
confirm Appellants' ownership interests in the
respective loans and ratify all actions taken by
Appellants in furtherance of foreclosure. The Land
Court's rulings to the contrary were plain error.
C. The Land Court's Holdings, If Affirmed, Must
Be Limited To Prospective Application
Even if this Court adopts the Land Court's
interpretation of Mass. Gen. L. ch. 244, § 14, that
interpretation cannot be applied retroactively to
transactions that occurred before this Court's
disposition of the issue. -In the area of property
law, the retroactive invalidation of an established
principle is to be undertaken with great caution."
Powers v. Wilkinson, 399 Mass. 650, 662-63 (1987).
Thus, judicial changes to established property law are
typically given only prospective effect. Id.; Charron
v. Amaral, 451 Mass. 767, 772-73 (2008); Turner v.
Greenaway, 391 Mass. 1002, 1003 (1984). The practice
of executing and recording confirmatory assignments of
- 24 -
mortgage on a post-foreclosure basis is an established
practice (see REBA Title Standard No. 58, infra) and
was so at the time of the foreclosure sales at issue
here. The far-reaching consequences of the Land
Court's decisions, as explained below, mandate that
its novel rulings (if affirmed) should only apply
prospectively.
V. STATEMENT OF REASONS WHY DIRECT APPELLATE REVIEW
IS APPROPRIATE IN THE PRESENT CASES
Pursuant to Mass. R. App. P. 11(a) and Mass. Gen.
L. ch. 211A, § 10(a), the Court may grant an
application for direct appellate review where:
[T]he questions presented by the appeal are: (1)
questions of first impression or novel questions
of law which should be submitted for final
determination to the Supreme Judicial Court; (2)
questions of law concerning the Constitution of
the Commonwealth or questions concerning the
Constitution of the united States which have been
raised in a court of the Commonwealth; or (3)
questions of such public interest that justice
requires a final determination by the full
Supreme Judicial Court.
Mass. R. App. P. 11(a); see also Mass. Gen. L. ch.
211A, § 10 (a) .
Direct appellate review is warranted here because
the issues raised by the appeals directly and
substantially affect Massachusetts foreclosure law,
raise questions of significant public interest, and
- 25 -
implicate the validity of thousands of foreclosure
sales in the Commonwealth and the titles conferred as
a result of the same. The present appeals,
additionally, raise novel questions of law. The Land
Court's decision has ushered in an entirely new legal
regime, creating serious uncertainty throughout the
foreclosure and title industries in Massachusetts.
Accordingly, the Ibanez and Larace appeals are well-
suited and, in fact, callout for direct appellate
review by the Supreme Judicial Court.
The Land Court's decisions In Ibanez I and Ibanez
II arguably affect thousands of properties purchased
in good faith at foreclosure sales in Massachusetts -
including purchases that occurred long before the Land
Court issued its rulings. Foreclosed-upon borrowers
are now attempting to use these rulings to cast doubt
on the title to properties that had a foreclosure at
any point in their chain of sale, even if the
foreclosure occurred years ago and the property has
since been sold mUltiple times. Applying the Land
Court's reasoning, foreclosure sales conducted
pursuant to what it defines as invalid assignments are
void, and the property owners may not actually own the
properties they purchased in good faith. The Land
- 26 -
Court's a on the titles of
I such these
ies e.
Land Court's isions also
to Ie up ("REO" )
of var loan s and t
many ies, many less affluent
ties, vacant and e. As the ef of
Boston City Housing Authori I Evelyn
recently Court's is have
II , s
to clean up areas
ch] up
t our taliz
most devas
ff 14
, the Land Court it even more
fficult to s 1 homes cast doubt
on property
who ed
Its
14
ties/(a copy
Addendum} .
their
ions
s
ed in
stunted lity to
- 27 -
transfer interests throughout
Mass etts, infli harship on an
c an
s ing hous market.
tional Land Court firmat
s indus
execut confi
e form ter s s
has in common use in Mas ts since
the 1990s, it is
tIe No. 58, that:
See REBA Ti e S No. 58, in Eno &
Massachusetts Pract Law REBA
~ ~ ~ ~ - - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
No. 58 (4
th
. 2008).
ce
at least
REBA
where
by
t. S
acknowl the , post-
15
to
not
the
In May 2008, REBA s Title Standard No. 58
: \\ However, if
or stated to effec priori to
of a losure, then a
19
1
2007 may
Court. II REBA
caveat does not
the s a
- 28
losure ass as appl
REBA Ti S 58
The
trust.
val
to
a decree
of the note Ider
It further serves
act
Id., cmts. (citations tted) .
Whi REBA Ti e S
s ref try
to note
to Endorsee,
ting Trust
assignment of it.
ter
mortgage
of
as an es
by
are not law,
, are reI upon
by indus practitioners, are based on Massachusetts
law, and are cit courts as persuasive
See In re 393 B 259, 267 8
(Bankr. D. Mass. 2008); In re Varri , 354 B.R.
563, 571 (Bankr. D. Mass. 2006); Drowne v. Balerna, 65
Mass. Ct. 1115, at *3 (Feb. 1, 2006) ished
(relying on REBA title s ) .
Land Court's decis Ibanez I
Ibanez II ect ce of
irmatory, t- ass in
do so, have left a signi cant r
wake. ~
storical been, a obj The
29
Land Court's s c
ec on its Direct
will resolve wide-
the
244 and 183.
As
issues pres
novel
t
s
no matter the
on
on of Mass. Gen. L.
set
on of s dif
years case law,
res
involve
statutes,
long-
on of which,
11 a significant t
etts
e issues
of state law, necessitat
ial Court. Court,
grant
Review.
lants'
Vi • CONCLUSiON
For the
as Trustee, and WeI
request the
i
icat
reasons,
, as Trustee,
Court
t late ew.
- 30 -
, should
u.s.
tful
s
16, 2010
t ly submitted,
U.S. BANK NATIONAL ASSOCIATION, as
TRUSTEE FOR THE STRUCTURED ASSET
SECURITIES CORPORATION PASS-THROUGH
CERTIFICATES, SERIES 2006 Z,
WELLS FARGO BANK, N.A., as TRUSTEE
FOR ABFC 2006 TRUST, ABFC
ASSET-BACKED , SERIES
2005-0PT1,
5
67103)
Andrew C. Glass (BBO#63 62)
W. , III (BBO#663626)
K&L GATES LLP
State Street F.J..HcuJ.I..- Center
One Lincoln Street
Boston, Mas etts 02111-2950
617.261.3100 ( )
6 . 261.3175 (
- 31 -
CERTIFICATE SERVICE
I certi on 16
th
, 2010, I served two copies of
for Appel Review, f t
the fol counsel of
For Ibanez:
Paul R. 1 , III, Esq.
12 Floor
stan Street
Plain, MA 02130
e Lawrence, Esq.
ces Center of
Greater Boston Services
197 St.
Boston, MA 02114
day of
Appl
s I,
Law
lees Mark A. L. Larace
enn F. Russ 1, Jr., Esq.
At at Law
38
, MA
te #
02720
- 32
on
ADDENDUM TO
APPELLANTS' CONSOLIDATED APPLICATION
FOR DIRECT APPELLATE REVIEW
-33-
TAB 1:
TAB 2:
TAB 3:
TAB 4:
TAB 5:
TAB 6:
TAB 7:
TAB 8:
TAB 9:
i
National
Case No.
fi
(KCL)
WeI
Bank, N.A., as Trustee v. Larace, Case No.
08 MISC 386755 (KCL)
on
, Motion for of Default
March 26, 2009
Court's Memorandum Order on
ffs' to Vacate Judgment ed
October 14, 2009
ff, U.S.
as Trusteels
l
National
of
fC Fargo , N. A., as
Trustee's, Notice of
Mass. Gen. L. 244, § 14
osures
October
15, 2009
V. tar Mort.
cv-40257-PBS, Order re: Motion for
Stay Appeal (D. Mass. Oct. 18, 2007)
-34
CRTR2709·CR
COMMONWEAL TH OF MASSACHUSETTS
LAND COURT DEPARTMENT
Docket Report
08 MiSe 384283
U.S.Bank National Association, as v. Ibanez, Antonio et al LONG
CASE TYPE: Miscellaneous
ACTION CODE: COT
DESCRIPTION: COT - Remove Cloud on Title, G.L.
CASE TRACK:
CASE SESSION: Courtroom 6
[ LINKED CASE:
PARTIES
01/08/2010 11:08 am Case No: 08 MISC 384283
FILE DATE:
CASE STATUS:
STATUS DATE:
CASE JUDGE:
09/16/2008
Closed
03/26/2009
Long, Keith C
Page: 1
CRTR2709-CR COMMONWEALTH OF MASSACHUSETTS
LAND COURT DEPARTMENT
Docket Report
08 Mise 384283
U.S_Bank National Association, as v. Ibanez, Antonio et al
Plaintiff: U.S. Bank National Association. as Trustee fo
Defendant: Antonio Ibanez (heirs, etc)
[printed: 01/08/2010 11 :08 am Case No: 08 MISC 384283
Private Counsel
Robert Bruce Allensworth
K&L Gates LLP
K&L Gates LLP
State Street Financial Center
One Lincoln Street
Boston. MA 02111-2950
Work Phone (617)261 -3119
Work Phone (617)261-3100
Added Date: 12/07/2009
Private Counsel
Walter Harley Parr
Ablitt Law Offices, P.C.
Ablitt Law Offices, P.C.
304 Cambridge Road
Woburn. MA 01801
Work Phone (781 )246-8995
Work Phone (781 )569-6025
Work Phone (781 )246-8995
Work Phone (617)953-3420
Work Phone (781 )286-8166
Work Phone (617)961-3465
Added Date: 09/16/2008
Private Counsel
Coleen Hayes
Ablitt Law Office. PC
Ablitt Law Office, PC
304 Cambridge Street
5th Floor
Woburn, MA 01801
Work Phone (781 )246-8995
Work Phone (978)664-8201
Work Phone (000)000-0000
Added Date: 09/16/2008
Private Counsel
Robert W. Sparkes
K&L Gates LLP
K&L Gates LLP
State Street Financial Center
One Lincoln Street
Boston, MA 0211 1
Work Phone (978)337-4309
Work Phone (617)261 -3100
Work Phone (617)951-9134
Added Date: 12/07/2009
015820
659462
650005
663626
Page: 2
C R T R 2 7 0 ~ C R
Defendant: Antonio Ibanez
Printed: 01/08/2010 11 :08 am
COMMONWEALTH OF MASSACHUSETTS
lAND COURT DEPARTMENT
Docket Report
08 MISC 384283
U.S.Bank National Association, as v. Ibanez, Antonio et al
Case No: 08 MISC 384283
Private Counsel
Paul Rodney Collier
Attorney at Law
Attorney at Law
Central Plaza,12th Floor
675 Massachusetts Avenue
Cambridge, MA 02139
Work Phone (617)441-3300
Added Date: 06/01/2009
092040
Page: 3
CRTR2709-CR COMMONWEALTH OF MASSACHUSETTS
LAND COURT DEPARTMENT
Docket Report
08 MISC 384283
U.S.Bank National Association, as v. Ibanez. Antonio et al
DOCKET ENTRIES
Case assigned to the Average Track per Land Court Standing Order 1 :04.
Land Court miscellaneous filing fee 154641 Date: 09/16/2008
Land Court surcharge Receipt: 154641 Date: 09/16/2008
Land Court summons Receipt 154641 Date: 0911612008
Full Party Name: U.S. Bank National Association. as Trustee for the Structured Asset
Securities Corporation Mortgage Pass-Through Certificates, Series 2006-Z
Uniform Counsel Certificate for Civil Cases filed by Plaintiff.
The case has been assigned to the A Track. Notice sent
Event Scheduled
Event: Case Management Conference
Date: 11117/2008 Time: 03:00 PM
Notice sent to attorneys Walter H. Porr, Jr. and Coleen Hayes.
Result: Case Management Conference held
Summons returned to Court with service on Antonio Ibanez filed.
Motion for General Default filed.
Case Management Conference Held
The following event: Case Management Conference scheduled for 11/17/2008 03:00
PM has been resulted as follows:
Result: Case Management Conference held
Request for Default pursuant to Mass. RCiv.P.55(a) on Defendant Antonio Ibanez,
filed.
Defendant Antonio Ibanez defaulted pursuant to Mass. RCiv. P. 55(a). (Patterson,
Notice of Docket Entry. Defendant Antonio Ibanez defautled pursuant to Mass.
RCiv. P. 55(a). (Patterson. Rec.)
Copies sent to Walter H. Porro Jr., Esq. and Coleen E. Esq.
Affidavit of Sean Burke filed.
Affidavit of Walter H. Porr, Jr filed.
Scheduled
Event: Telephone Conference Call
Date: 0210212009 Time: 09: 15 AM
Notice sent to Walter H. Porro Jr. Esq
Result: Status Conference held.
Scheduled
Event: Motion
Date: 02/11/2009 Time: 10:30 AM
Notice sent to Walter H. Porr, Jr. Esq.
Result: Taken under advisement.
CRTR2709-CR
02/02/2009
02/02/2009
02/02/2009
02/06/2009
02/06/2009
02/11/2009
02/17/2009
03/26/2009
03/26/2009
04/06/2009
04/06/2009
04/08/2009
04/16/2009
0411712009
04/17/2009
04117/2009
COMMONWEALTH OF MASSACHUSETTS
LAND eOURT DEPARTMENT
Docket Report
08 Mise 384283
U.S.Bank National Association, as v. Ibanez, Antonio at al
Event Resulted
The following event: Telephone Conference Call scheduled for 02/02/2009 09: 15 AM
has been resulted as follows:
Result: Status Conference held,
Affidavit of Walter H, Parr, Jr, filed,
Motion for Entry of Default Judgment filed.
Supplemental Memorandum of Law In Support of Motion for Entry of Default
Judgment filed.
Supplemental Affidavit of Walter H. Parr, Jr. filed.
Event Resulted
The event: Motion scheduled for 02111/200910:30 AM has been resulted
as follows:
Result: Taken under advisement.
Second Supplemental Memorandum of law In Support of Motion for Entry of Default
Judgment filed.
Memorandum and Order on Plaintiffs' Motions for Entry of Default Judgment, issued.
Sent to Attorneys Walter H: Parr and Coleen E. Hayes)
Judgment entered.
Motion for Expedited
Sent to Attorneys Walter H. Parr and Coleen E. Hayes}
on Plaintiffs Motion to Vacate filed.
Motion to Vacate Judgment filed.
Scheduled
Event: Motion
Date: 04/17/2009 Time: 02:00 PM
Notice sent to Walter H. Parr, Esq.
Result: Event Held
Motion to Intervene with Points and Authorities filed.
Motion to Intervene in the Public Interest for the Purpose of Submitting an Amicus
Affidavit and AnalYSIS and to at the to Be Held on April 17, 2009
filed.
Event Resulted
The following event: Motion scheduled for 04/17/2009 02:00 PM has been resulted
as follows:
Result: Plaintiffs Motion to Vacate Judgment Heard.
Motion to Intervene with Points and Authorities DENIED for reasons stated on the
record at the April 17, 2009
CRTR2709-CR
04/21/2009
04/28/2009
04/28/2009
05/27/2009
06/01/2009
06/08/2009
06/08/2009
Printed: 01/08/2010 11:08 am
COMMONWEALTH OF MASSACHUSETTS
LAND COURT DEPARTMENT
Docket Report
08 MiSe 384283
U.S.Bank National Association, as v. Ibanez, Antonio et al
Notice of Docket Entry: Plaintiffs Motion to Vacate Judgment Heard on April 17,
2009. The Plaintiff Conceded that its Complaint Alleged the Post-Notice, Post-Sale
Assignment of the Mortgage at Issue to the Entity in whose Name Notice was Given
and the Foreclosure Sale Conducted (see G. L. c. 231, sec 87 D$u Party Bound by
Alle9ations in its Pleadings) but now Represents that Documents may Exist which
may Show a Pre-Notice, Pre-Sale Assignment Sufficient under G. L. c. 244, sec 14.
Accordingly, the Plaintiff was Given Leave to Submit the Following Materials (and
only these Materials), each of which must be Properly Authenticated: (1) the
Documents which Created the Securitized Trust and Govern its Operations, (2) the
Documents Identifying the "Blocks of Mortgages Sold into that Trust," which
Purportedly Include the Mortgage at Issue in this Case, (3) the "Collateral File" for the
Mortgage as it Existed at the Time the Foreclosure Sale was Noticed and
Conducted, which was Represented to Include the Original Note, the Original (or a
Copy) of the Mortgage, Endorsements or Assignments "in Blank," "Other
Documents," and Perhaps a Timely Assignment in Recordable Form, (4) the Master
Servicing Agreement, Showing the Relationship between the Trust and the Loan
Servicer (which Apparently was the Entity Instructing and Supervising the Attorneys
who Noticed and Conducted the Foreclosure), (5) the Power of Attorney under which
the Loan Servicer Acted in this Instance, along with its Recording Information, and
(6) the Powers of Attorney or Certificates of Incumbency, which Purportedly Evidence
the Authority of the Particular Individuals who Acted on Behalf of the Loan Servicer in
this Instance, along with their Recording Information. The Court has Concerns about
the Apparent Practice of Assignments "in Blank," what Plaintiff Means by that Term,
the Legal Sufficiency of Such a Practice in the Context of Mortgage Assignments and
G. L. c. 244, sec 14, and the Possibility that Names may have been Placed on those
Documents Post-Notice and Post-Sale. Accordingly, all Documents Reflecting or
Purporting to Reflect an Assignment of the Promissory Note or Mortgage must be
Produced in the Form they Existed at the Time the Foreclosure Sale was Noticed
and Conducted, along with an Affidavit from a Witness with Direct Personal
Knowledge so Attesting. That Witness must also be Available for Examination at an
Evidentiary Hearing if the Court so Directs. The Documents Listed Above must be
Filed with the Court no Later than May 27, 2009, along with a Certificate Showing
Service on the Defendants and on Counsel for Amici Darlene Manson, Keith
Nicholas, Deborah Nicholas and Germano DePina (Kevin Costello, Esq., RODDY
KLEIN & RYAN, 727 Atlantic Avenue, 2nd Floor, Boston MA 02111). The Plaintiff
may also File a Memorandum Explaining the Documents and its Contentions
Regarding their Significance. The Court will Act on the Motion to Vacate after it
Receives and Reviews these Materials, and after the Amici have had a Reasonable
Time (not to Exceed Ten Business Days) to Submit a Memorandum Regarding
them. (Notices Sent to Attorneys Walter H. Porr, Jr., and Kevin Costello; also Sent
to Mr. Antonio Ibanez)
Motion to Intervene in the Public Interest for the Purpose of Submitting an Amicus
Affidavit and Analysis and to Appear at the Hearing to Be Held on April 17, 2009
ALLOWED.
Amicus Brief of Marie McDonnell of Truth In Lending Audit and Recovery Services,
LLC filed.
Motion for Extension of Time to File Third Supplemental Memorandum of Law in
Support of Motion for Entry of Default Judgment filed and ALLOWED IN PART.
Plaintiffs time to comply with the court's April 21, 2009 Notice of Docket Entry is
extended to 4:00 p.m., June 8, 2009.
Appearance of Paul Rodney Collier III, Esq. for Antonio Ibanez.
. . . . ..
Second Supplemental Affidavit of Walter H. Porr, Jr. filed.
Affidavit of Michelle Halyard filed.
Case No: 08 MISC 384283 Page: 6
CRTR2709-CR
06/08/2009
06/08/2009
06/11/2009
06/11/2009
06/11/2009
06/12/2009
06/12/2009
06/12/2009
06/1512009
06/17/2009
06/29/2009
06/29/2009
06/29/2009
06/30/2009
06/30/2009
06/30/2009
OJ /03/2009
10/14/2009
10/30/2009
10/30/2009
Printed: 01/08/2010 11:08 am
COMMONWEAL TH OF MASSACHUSETTS
LAND COURT DEPARTMENT
Docket Report
08 MiSe 384283
U.S.Bank National Association, as v. Ibanez, Antonio et al
Affidavit of Robert Salazar filed.
Third Supplemental Memorandum of 'Law in Support of Motion for Entry of Default
Judgment filed.
Defendant's Motion for Extension of Time to File Reply to Third Supplemental
. Memorandum filed.
Amicus Curiae's Motion for Enlargement of Time to File Responses to Plaintiffs'
Supplemental Materials and Memorandum of Law in Support of Plaintiffs' Motion for
Entry of Default Jud9ment filed.
Motion of Amici Curiae for Extension of Time to File Response to Third
Supplemental Memorandum filed.
Motion of Amici Curiae for Extension of Time to File Response to Third
Supplemental Memorandum ALLOWED. Response shall be due no later than June
29,2009.
Defendant's Motion for Extension of Time to File Reply to Third Supplemental
Memorandum ALLOWED. Response shall be due no later than June 29, 2009.
Amicus Curiae's Motion for Enlargement of Time to File Responses to Plaintiffs'
Supplemental Materials and Memorandum of Law in Support of Plaintiffs' Motion for
Entry of Default Judgment DENIED.
Motion to Intervene for the Purpose of Submitting an Amicus Brief filed.
... .
Motion of Real Estate Bar Association for Massachusetts for Leave to File a
Statement of Interest filed.
Motion for Leave to Appear as Amicus Curiae by National Consumer Law Center
. filed.
Consolidated Memorandum of Points and Authorities of Amici Curiae Darlene
Manson, Keith and Deborah Nicholas and Germano Depina and Proposed Amicus
National Consumer Law c:enter in Opposition to Plaintiffs' Motion to Vacate filed.
Memorandum of Antonio Ibanez in Opposition to Plaintiffs Motion to Vacate
Judgment filed . .
Motion of Amicus Curiae, Marie McDonnell, to Allow Her Affidavit and Expert Report
into the Record in the Above Referenced Cases filed.
Affidavit of Amicus Curiae, Marie McDonnell , Verifyin9 Her Expert Report Titled
"Evidence and the Burden of Proof in Documenting the Chain of Title in Securitized
Mortgage Transactions" filed.
Report Titled "Evidence and the Burden of Proof in Documenting the Chain of Title in
Securitized Mortgage Transactions" filed.
Affidavit of Thomas ", . Tarter (original) filed.
Memorandum and Order on the Plaintiffs' Motions to Vacate JUdgment, issued.
(Copies Sent to Attorneys Walter Harley Porr, Jr.. Coleen Hayes, Paul Rodney
Collier, III, Max Weinstein, Eloise P. Lawrence, David Dineen and Glenn F. Russell,
Jr.)
(Also Sent to Amici: Attorneys Edward A. Rainen, Ward P. Graham, Martin R.
Haller, Robert J. Moriarty, Jr., Kevin Costello, Gary Klein, Shennan Kavanagh.
Robert Hobbs, Marie McDonnell and Reneau L. Longoria)
Notice of Appeal by U.S. Bank National Association, as Trustee for the Structured
Asset Securities Corporation, etc. to the Appeals Court filed.
Letter and Supporting Documents filed by David C. Breidenbach, Esq.
Case No: 08 MISC 384283 Page: 7
CRTR2709·CR
12/07/2009
12/07/2009
1210712009
Printed: 01/08/2010 11 :08 am
COMMONWEALTH OF MASSACHUSETTS
LAND COURT DEPARTMENT
Docket Report
08 MiSe 384283
U.S.Bank National Association, as v. Ibanez, Antonio et al
Notice of Order of Transcripts of Proceedings for Appeal of Plaintiffl Appellant U.S.
Bank National Association, as Trustee, filed.
Appearance of Robert Bruce Allensworth Esq. for U.S. Bank National Association, as
Trustee for the. Structured Asset Securities Corporation, etc ..
Appearance of Robert W. Sparkes III, Esq. for U.S. Bank National Association, as
Trustee for the Structured Asset Securities Corporation, etc ..
Case No: 08 MISC 384283 Page: 8
r .,
CRTR2709-CR
CASE TYPE:
ACTION CODE:
Miscellaneous
COT
COMMONWEAL TH OF MASSACHUSETIS
LAND COURT DEPARTMENT
Docket Report
08 MISC 386755
Wells Fargo Bank, N.A., as v. Larace, Mark et al LONG
FILE DATE:
CASE STATUS:
DESCRIPTION:
COT - Remove Cloud on Title, G,L. STATUS DATE:
10/30/2008
Closed
03/26/2009
CASE TRACK: CASE JUDGE:
Long, Keith C
CASE SESSION: Courtroom 6
LINKED CASE:
PARTIES
Plaintiff: Wells Fargo Bank, NA, as Trustee for ABFC Private Counsel
Robert Bruce Allensworth
K&L Gates LLP
K&L Gates LLP
State Street Financial Center
One Lincoln Street
Boston, MA 02111-2950
Work Phone (617)261-3119
Work Phone (617)261-3100
Added Date: 12/07/2009
Private Counsel
Walter Harley Porr
Ablitt Law Offices, P.C,
Ablitt Law Offices, P,C,
304 Cambridge Road
Woburn, MA 01801
Work Phone (781 )246-8995
Work Phone (781)569-6025
Work Phone (781 )246-8995
Work Phone (617)953-3420
Work Phone (781)286-8166
Work Phone (617)961-3465
Added Date: 10/30/2008
Private Counsel
Robert W. Sparkes
K&L Gates LLP
K&L Gates LLP
State Street Financial Center
One Lincoln Street
Boston, MA 02111
Work Phone (978)337-4309
Work Phone (617)261-3100
Work Phone (617)951-9134
Added Date: 12/07/2009
I Printed: 01/08/2010 11 : 1 0 am Case No: 08 MISC 386755
015820
659462
663626
Page: 1
CRTR2709·CR
Defendant: Mark A Larace
Defendant: Tammy L Larace
Printed: 01/08/2010 11:10 am
COMMONWEALTH OF MASSACHUSETTS
LAND COURT DEPARTMENT
Docket Report
08 MiSe 386755
Wells Fargo Bank, N.A., as v. Larace, Mark at al
Case No: 08 MISC 386755
Private Counsel
Glenn F. Russell
Law Office of Glenn F. Russell, Jr.
Law Office of Grenn F. Russell, Jr.
38 Rock Street
Suite #12
Farr River, MA 02720
Work Phone (508)673-4545
Work Phone (508)324-4545
Work Phone (401 )253-2352
Work Phone (401)349-3055
Work Phone (401)243-3509
Added Date: 06/01/2009
Private Counsel
Glenn F. Russell
Law Office of Glenn F. Russell, Jr.
Law Office of Glenn F. Russell, Jr.
38 Rock Street
Suite#12
Fall River, MA 02720
Work Phone (508)673-4545
Work Phone (508)324-4545
Work Phone (401 )253-2352
Work Phone (401 )349-3055
Work Phone (401)243-3509
Added Date: 06/01/2009
656914
656914
CRTR2709-CR
Date
10/30/2008
10/30/2008
10/30/2008
10/30/2008
10/30/2008
10/3012008
10/30/2008
11/10/2008
11/1712008
12/02/2008
12/29/2008
12/31/2008
01/05/2009
01/05/2009
01/07/2009
I Reference
Printed: 01/08/2010 11:10 am
COMMONWEALTH OF MASSACHUSETTS
LAND COURT DEPARTMENT
Docket Report
08 MiSe 386755
Wells Fargo Bank, N.A., as v. Larace, Mark et al
DOCKET ENTRIES
Description
Complaint filed.
Case assigned to the Average Track per Land Court Standing Order 1 :04.
Land Court miscellaneous filing fee Receipt: 158469 Date: 10/30/2008
Land Court surcharge Receipt: 158469 Date: 10/30/2008
. . . ..
Land Court summons . Receipt : 158469 Date: .1 0/30/2008
Full Party Name: Wells Fargo Bank. N.A., as Trustee for ABFC 2005-0PT1 Trust,
ABFC Asset Sacked Certificates Series 2005-0PT 1
Uniform Counsel Certificate for Civil Cases filed by Plaintiff.
The case has been assigned to the A Track. Notice sent.
Event Scheduled
Event: Case Management Conference
Date: 01/05/2009 Time: 03:00 PM
Notice sent to Walter H. Porr, Jr. . Esq.
Result: Case Management Conference held
Summons returned to Court with service on Marl<. A larace, Tammy l Larace filed.
. . .
Request for Default pursuant to Mass. R.Civ.P.55(a) on Defendant Mark A Larace,
Tammy L larace, filed.
Case Management Statement (faxed) filed.
Case Management Conference Held
The following event: Case Management Conference scheduled for 01/05/2009 03:00
PM has been resulted as follows:
Result: Case management conference held. In this case, the plaintiff seeks a
declaration that it has clear title to residential property in Springfield as a result of its
foreclosure sale. The issues are two-fold: (1) whether publication of the foreclosure
sale in the Boston Globe complied with G.L. c. 244, sec 14 (i.e. whether the Boston
Globe is "a newspaper with general circulation in the town where the land lies," in this
case Springfield) within the meaning of the statute, and (2) whether the plaintiffs
failure to record its mortgage assignment prior to the conduct of the foreclosure sale
invalidates that sale. See G.L. c. 244, sec 14. Plaintiff stipulated that its assignment
of the mortgage was not recorded prior to the foreclosure sale. Another case in
which the plaintiff is represented by Attorney Porr (LaSalle Bank National Association
v. Freddy Rosario. et al. Misc. Case No. 386018) involves the same issues, which
the plaintiff intends to address through a motion for entry of default and default
judgment. Accordingly, both cases will follow the same schedule and be heard
together. A telephone status conference is scheduled for February 2, 2009, at 9: 15.
to confirm that the plaintiff has filed a motion for entry of default and default judgment
by that date. A hearing on that motion is scheduled for February 11, 2009, at 10:30.
Alternative Dispute Resolution: Early Intervention Event held.
Scheduled
Event: Telephone Conference Call
Date: 02/02/2009 Time: 09:15 AM
Notice sent to Walter H. Porr, Jr., Esq.
Result: Status Conference held.
Case No: 08 MISC 386755 Page: 3
CRTR2709·CR
01/07/2009
01/07/2009
02/02/2009
02/02/2009
02/04/2009
02/06/2009
02/06/2009
02/11/2009
02/1712009
03/26/2009
03/26/2009
04/06/2009
04/06/2009
04/08/2009
04/16/2009
04/17/2009
04/17/2009
04/17/2009
Printed: 01/08/2010 11 :10 am
COMMONWEALTH OF MASSACHUSETTS
LAND COURT DEPARTMENT
Docket Report
08 MiSe 386755
Wells Fargo Bank, N.A., as v. Larace, Mark et al
Scheduled
Event: Motion for Judgment
Date: 02111/2009 Time: 10:30 AM
Notice sent to Walter H. Parr. Jr .. Esq.
Result: Taken under advisement.
Notice of Docket Entry of Case Management Conference Sent to Walter Harley Parr,
Jr .. , Esq.
Event Resulted
The following event: Telephone Conference Call scheduled for 02/02/200909: 15 AM
has been resulted as follows:
Result: Status Conference held.
Affidavit of Walter H. Parr, Jr. filed.
Motion for Entry of Default Judgment filed.
Supplemental Memorandum of Law In Support of Motion for Entry of Default
Judgment fi.led.
Supplemental Affidavit of Walter H. Parr, Jr. filed.
Event Resulted
The following event: Motion for Judgment scheduled for 02/11/200910:30 AM has
been resulted as follows:
Result: Taken under advisement.
Second Supplemental Memorandum of Law In Support of Motion for Entry of Default
. Judgment filed.
Memorandum and Order on Plaintiffs' Motions for Entry of Default JUdgment, issued.
(Copies Sent to Attorneys Walter H. Parr, and Coleen Hayes)
Judgment entered. (Copies Sent to Attorneys Walter H. Parr, and Coleen Hayes)
Motion for Expedited Hearing on Plaintiffs Motion to Vacate Judgment filed.
Motion to Vacate Judgment filed.
Scheduled
Event: Motion
Date: 04/17/2009 Time: 02:00 PM
Notice sent to Walter H. Parr, Esq.
Result: Event Held
Motion to Intervene with Points and Authorities filed.
Motion to Intervene in the Public Interest for the Purpose of Submitting an Amicus
Affidavit and Analysis and to Appear at the Hearing to Be Held on April 17, 2009
filed .
Event Resulted
The following event : Motion scheduled for 04/17/2009 02:00 PM has been resulted
as follows:
Result: PlainmfsMotion to Vacate Judgment Heard.
Motion to Intervene with Points and Authorities DENIED for reasons stated on the
. record attheApril17. 2009 hearing.
Case No: 08 MiSe 386755 Page: 4
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COMMONWEALTH OF MASSACHUSETIS
LAND COURT DEPARTMENT
Docket Report
08 Mise 386755
Wells Fargo Bank, N,A" as v, Larace, Mark et al
Notice of Docket Entry: Plaintiff's Motion to Vacate Judgment Heard on April 17,
2009. The Plaintiff Conceded that its Complaint Alleged the Post-Notice, Post-Sale
Assignment of the Mortgage at Issue to the Entity in whose Name Notice was Given
and the Foreclosure Sale Conducted (see G. L. c. 231, sec. 87 D$u Party Bound by
Allegations in its Pleadings) but now Represents that Documents may Exist which
may Show a Pre-Notice, Pre-Sale Assignment Sufficient under G. L. c. 244, sec. 14.
Accordingly, the Plaintiff was Given Leave to Submit the Following Materials (and
only these Materials), each of which must be Properly Authenticated: (1) the
Documents which Created the Securitized Trust and Govem its Operations, (2) the
Documents Identifying the "Blocks of Mortgages Sold into that Trust," which
Purportedly Include the Mortgage at Issue in this Case, (3) the "Collateral File" for the
Mortgage as it Existed at the Time the Foreclosure Sale was Noticed and
Conducted, which was Represented to Include the Original Note, the Original (or a
Copy) of the Mortgage, Endorsements or Assignments "in Blank," "Other
Documents," and Perhaps a Timely Assignment in Recordable Form, (4) the Master
Servicing Agreement, Showing the Relationship between the Trust and the Loan
Servicer (which Apparently was the Entity Instructing and Supervising the Attorneys
who Noticed and Conducted the Foreclosure), (5) the Power of Attorney under which
the Loan Servicer Acted in this Instance, along with its Recording Information, and
(6) the Powers of Attorney or Certificates of Incumbency, which Purportedly Evidence
the Authority of the Particular Individuals who Acted on Behalf of the Loan Servicer in
this Instance, along with their Recording Information. The Court has Concerns about
the Apparent Practice of Assignments "in Blank," what Plaintiff Means by that Term,
the Legal Sufficiency of Such a Practice in the Context of Mortgage Assignments and
G. L. c. 244, sec. 14, and the Possibility that Names may have been Placed on those
Documents Post-Notice and Post-Sale. Accordingly, all Documents Reflecting or
Purporting to Reflect an Assignment of the Promissory Note or Mortgage must be
Produced in the Form they Existed at the Time the Foreclosure Sale was Noticed
and Conducted, along with an Affidavit from a Witness with Direct Personal
Knowledge so Attesting. That Witness must also be Available for Examination at an
Evidentiary Hearing if the Court so Directs. The Documents Listed Above must be
Filed with the Court no Later than May 27, 2009, along with a Certificate Showing
Service on the Defendants and on Counsel for Amici Darlene Manson, Keith
Nicholas, Deborah Nicholas and Germano DePina (Kevin Costello, Esq., RODDY
KLEIN & RYAN, 727 Atlantic Avenue, 2nd Floor, Boston MA 02111). The Plaintiff
may also File a Memorandum Explaining the Documents and its Contentions
Regarding their Significance. The Court will Act on the Motion to Vacate after it
Receives and Reviews these Materials, and after the Amici have had a Reasonable
Time (not to Exceed Ten Business Days) to Submit a Memorandum Regarding
them. (Notices Sent to Attorneys Walter H. Porr, Jr., and Kevin Costello; also Sent
to Mark Larace and Tammy Larace)
Motion to Intervene in the Public Interest for the Purpose of Submitting an Amicus
Affidavit and Analysis and to Appear at the Hearing to Be Held on April 17, 2009
ALLOWED.
Amicus Brief of Marie McDonnell of Truth In Lending Audit and Recovery Services,
LLC filed.
Motion for Extension of Time to File Third Supplemental Memorandum of Law in
Support of Motion for Entry of Default Judgment filed and ALLOWED IN PART.
Plaintiff's time to comply with the court's April 21, 2009 Notice of Docket Entry is
extended to 4:00 p.m., June 8, 2009.
Appearance of Glenn F. Russell Jr., Esq. for Mark A Larace, Tammy L Larace.
. . .
Second Supplemental Affidavit of Walter H. Porr, Jr. filed.
Affidavit of Michelle Halyard filed.
Case No: 08 MISC 386755 Page: 5
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06/29/2009
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06/30/2009
06/30/2009
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Printed: 01/08/2010 11 : 1 0 am
COMMONWEALTH OF MASSACHUSETTS
LAND COURT DEPARTMENT
Docket Report
08 MiSe 386755
Wells Fargo Bank, N.A., as v. Larace, Mark et al
Affidavit of Robert Salazar filed.
Third Supplemental Memorandum of Law in Support of Motion for Entry of Default
Judgment filed.
Amicus Curiae's Motion for Enlargement of Time to File Responses to Plaintiffs'
Supplemental Materials and Memorandum of Law in Support of Plaintiffs' Motion for
Entry of Default Judgment filed.
Motion of Amici Curiae for Extension of Time to File Response to Third
Supplemental Memorandum filed.
Motion of Amici Curiae for Extension of Time to File Response to Third
Supplemental Memorandum Allowed. Response shall be due no later than June 29,
2009.
Amicus Curiae' s Motion for Enlargement of Time to File Responses to Plaintiffs'
Supplemental Materials and Memorandum of Law in Support of Plaintiffs' Motion for
Entry of DefaultJudgment [)ENIED.
Motion of Real Estate Bar Association for Massachusetts for Leave to File a
Statement of Interest filed .
Memorandum in Support of Opposition to Plaintiffs Motion for Entry of Default
Judgment filed.
Motion for Leave to Appear as Amicus Curiae by National Consumer Law Center
filed.
Consolidated Memorandum of Points and Authorities of Amici Curiae Darlene
Manson, Keith and Deborah Nicholas and Germano Depina and Proposed Amicus
NationalConsurner .Law Center in Opposition to Plaintiffs' Motion to Vacate filed ..
Motion of Amicus Curiae, Marie McDonnell, to Allow Her Affidavit and Expert Report
into the Record in the Above Referenced Cases filed.
Affidavit of Amicus Curiae, Marie McDonnell, Verifying Her Expert Report Titled
"Evidence and the Burden of Proof in Documenting the Chain of Tille in Securitized
Mortgage Transactions"fBed.
Report Titled "Evidence and the Burden of Proof in Documenting the Chain of Title in
. Securitized Mortgage Transactions" filed .
Memorandum and Order on the Plaintiffs' Motions to Vacate Judgment, issued.
(Copies Sent to Attorneys Walter Harley Porr, Jr. , Coleen Hayes, Paul Rodney
Collier, III , Max Weinstein, Eloise P. Lawrence, David Dineen and Glenn F. Russell ,
Jr.)
(Also Sent to Amici: Attorneys Edward A. Rainen, Ward P. Graham, Martin R.
Haller, Robert J. Moriarty, Jr , Kevin Costello, Gary Klein, Shennan Kavanagh,
Robert Hobbs, Marie McDonnell and Reneau L. Longoria)
Notice of Appeal by Wells Fargo Bank, NA, as Trustee for ABFC 2005·0PT1 Trust,
ABFC Asset Backed etc to the Appeals Court filed.
Letter and Supporting Documents filed by David C. Breidenbach, Esq.
Notice of Order of Transcripts of Proceedings for Appeal of Plaintiffl Appellant Wells
Fargo Bank, N.A., as Trustee, filed.
. . .
Appearance of Robert Bruce Allensworth Esq. for Wells Fargo Bank, N.A., as
Trustee for ABFC 2005-0PT1 Trust, ABFC Asset Backed etc.
Appearance of Robert W. Sparkes III , Esq. for Wells Fargo Bank, NA, as Trustee
. for ABFC 2005-0PT1 Trust , ABFC Asset Backed etc.
Case No: 08 MISC 386755 Page: 6
,-
(SEAL)
[,)
COMM:ONWEAL TH OF MASSACHUSETTS
THE TRIAL COURT
LAND COURT DEPARTMENT


HAWDEN,ss.
)
U.S. BANK NATIONAL ASSOCIATION, )
as trustee for the Structured Asset ) ,
Securities Corporation Mortgage Pass- )
Through Certificates, Series 2006-Z, )
Plaintiff,
v.
ANTONIO IBANEZ,
Defendant.
LASALLE BANK NATIONAL
ASSOCIATION, as trustee for the
certificate holders of Bear Steams Asset
Backed Securities I, LLC Asset-Backed
Certificates Series 2007-HE2,
Plaintiff,
v.
FREDDY ROSARIO,
Defendant
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

WELLS N.A., as trustee
for ABFC 2005-0PT 1 Trust, ABFC Asset
Backed Certificates Series 2005-0PT 1,
Plaintiff,
v.
MARK A. LARACE and TAMMY L.
LARACE,
Defendants.
)
)
)
)
)
)
)
)
)
)
)

MISC. CASE NO. 384283 (KCL)
MISC. CASE NO. 386018 (KCL)
MISC. CASE NO. 386755 (KCL)
MEMORANDUM AND ORDER ON PLAlNTIFFS' MOTIONS FOR ENTRY OF
DEFAULT JUDGMENT
/' 'j"
. ,
I
In.troduction. and Facts
The above-captioned c a s e s ~ each brought pursuant to G.L. c. 240, § 6 to a cloud
from the title" of the ....... ,., ..... _-f"'I in question, present two !;::';:O\A<;.i:I. one common and other in
variations. Each arises from a foreclosure sale of property in Springfield. The first issue is
whether the Boston Globe, in which the notices sale were published, was "a
newspaper with general circulation the town where the land lies" (Springfield) within the
meaning of G.L. c. 2 4 4 ~ § 14 at the v ..... .1LU_ ... v.u.
1
The sa:on:Q whether the published
which named the plaintiffs as the foreclosing parties even though. they had no record
interest the property at the of either publication or foreclosure, complied with G.L. c.
§ 14.
The variations of the second issue are as follows. In Ibanez, U.S. Bank National
in whose name notice was published and sale took place, had no interest in the
mortgage foreclosed (either recorded or unrecorded) at the time of publication or
....... V.t.l..l.f-l"""' .... to Remove Cloud from at 'If 3; ,. 8 (Sept 12,2008) (filed in Misc. 384283)
..................... L the "Ibanez Complaint"). Further, there was nothing in notice to indicate that it
was ,,",,"'Lll& (or purporting to act) as someone else's much less the agent of the
Motion of Default LJ.UJ;,lll .... JLU at 3 (Jan. 30, 2009) Misc. 384283) lneretml!ter
"Ibanez Motion"}. only acquired an interest the Ibanez mortgage by asslgnmeJc.t
The notice in Rosario was on June 5, and 19,2007 for auction to take place on June 26, 2007.
Complaint to Remove Cloud from at 2, ,. 5; 3,1 g (Oct. 16, 2008) in Misc. 386018) (hereinaft:cr, the
"Rosario The notices in Ibanez and Larace were published on June 14, and 2007 for auctions
to take place on July 5,2007. Complaint to Remove Cloud from Title at 2, 1 5; 3, 18 (Sept 12,2(08) (filed in
384283) the ''Ibanez Complaint"); to Remove Cloud from Title at 2,15; 3, ,8 (Oct
23,2008) in Misc. 386755) (hereinafter, the '1...arace COIcpJallllf'
2 I to the by name LaSalle and Wells Fargo Bank) ease of
reference. None of these banks hold the mortgages in question for themselves. Instead. they are the servicing
trustees of the securitized mortgage pools identified in the case captions, which are the actual beneficial owners of
the Neither the details of the pools nor the of the t:rust agreements are relevant
of this Memorandum and Order, which assumes that the pools were duly and properly formed and COIlllpli,ant
applicable laws, that the mortgages in question were included in those pools, and that the
bad:full authority to act as they did.
2
(
nearly fourteen months after the auction took place. Ibanez Complaint at 2, ~ 3; 3, '8.
In Larace, Wells Fargo Bank, in whose name notice was published and sale took place,
also had no interest in the mortgage being foreclosed (either recorded or unrecorded) at the time
of publication or sale. Complaint to Remove Cloud from Title at 2, ,3; 3, , 8 (Oct. 23,2008)
(filed in Misc. 386755) (hereinafter, the "Larace Complaint"). There also was nothing to
indicate that it was acting (or PUIporting to act) as someone else's agent, much less the agent of
the principal. Motion for Entry of Default Judgment at 2-3 (Feb. 2, 2009) (filed in Misc.
386755) (hereinafter, the "Larace Motion"). However, it acquired the mortgage by assignment
ten months after the sale, with the assignment declaring an effective date prior to foreclosure
(April 18, 2007). Larace Complaint at 2, ,3.
In Rosario, LaSalle Bank, in whose name notice was published and sale took place, was
the unrecorded holder of the mortgage at the time of publication and sale, but did not record the
( . ~ assignment reflecting that interest until over a year after the sale. Complaint to Remove Cloud
from Title at 2, ,3; 3, , 8 (Oct. 16,2008) (filed in Misc. 386018) (hereinafter, the "Rosario
Complaint").
In each of these cases, the bank was the only bidder at the foreclosure sale. Stipulation of
Walter Porr, Esq., Counsel for Plaintiffs (Feb. 11,2009 oral argument).3 In Ibanez, the bank
bought the property for $94,350, which was $16,437.27 less than the amount of the outstanding
loan ($110,787.27) and $16,650 (15%) less than the bank's calculation of the property's actual
market value ($lll ,000). Ibanez Complaint at 3, ~ 8; Aff. of Walter H. Porr, Jr., Ex. G (Jan. 30,
2009). In Larace, the bank bought the property for $120,397.03, which was the amount of the
outstanding loan plus "all outstanding fees and costs" and $24,602.97 (17%) less than the bank's
I may consider such stipulation as an admission binding on the plaintiffs for purposes of these motions.
White v. Peabody Constr. Co., inc., 386 Mass. 121, 126 (1982).
. 3
calculation of the property's actual market value ($145,000). Lance Complaint at 3, '118; Aff. of
()
Walter H. Porr, Jr., Ex. E (Feb. 2, 2009). In Rosario, the bank bought the property for $136,000.
Rosario Complaint at 3, , 8. Unlike Ibanez and Larace, the record in Rosario does not include
information on the amount of the outstanding loan or the market value of the property.
According to the plaintiffs, despite their successful bids and their subsequent recording of
all the relevant documents, they cannot obtain title insurance for the properties - making them
effectively unsaleahle - unless and until these issues are resolved in their favor. They have thus
brought these actions seeking such relief. In each of these cases, the defendants (the
mortgagors/equity holders of the properties at issue) have been e r v ~ failed to respond, and
have been defaulted. The plaintiffs have moved for entry of default judgment The issues were
clearly identified before those motions were heard and the parties were given full opportunity to
submit whatever affidavits or other admissible materials they believed necessary for adjudication
of those issues. Notice of Docket Entry (Jan. 7, 2(09) (filed in each case).
Based on the record before me and for the reasons discussed below, I find and rule that
the Boston Globe was "a newspaper of general circulation" in Springfield at the time of the
notices and sales and thus meets that requirement ofG.L. c. 244, § 14. I also find and rule that
LaSalle Bank's foreclosure in Rosario was not rendered invalid by its failure to record the
assignment reflecting its status as the holder of the mortgage prior to the foreclosure since it was,
in fact, the holder by assignment at the time of the foreclosure, it truthfully claimed that status in
the notice, and it could have produced proof of that status (the unrecorded assignment) if asked.
4
Finally, I find and rule, however, that the other two foreclosures (U.S. Bank's in Ibanez and
Wells Fargo Bank's in Larace) are invalid because the notices that named those entities failed to
name the mortgage holder as of the date of the sale as required by G.L. c. 244, § 14. Neither
(r)
The notices gave its agent's (counsel for the foreclosure) name and address.
4
~ ,
(1)
t·Y
.. . ~ . : ...
"")
t,:"
, '/
. ~ ...t.... .
',' \
j
u.s. Bank nor Wells Fargo Bank had been assigned the mortgages at the time notice was
published and sale took place. Neither an intention to do so in the future nor the backdating of a
future assignment meets the statute's strict requirement that the holder of the mortgage at the
time notice is published and auction takes place be named in the notice.
Analysis
Whether Publication in the Boston Globe Was Sufficient to Meet the Requirements oIG.L. c.
244. § 14
G.L. c. 244, § 14 requires notification of a foreclosure sale to be published "in a
newspaper, if any, published in the town where the land lies or in a newspaper with general
. circulation where the land lies" for that sale to be valid. See Bottomly v. Kabachnick, 13 Mass.
App. Ct. 480, 484 (1982) ("The manner in which the notice of the proposed sale shall be given is
one of the important terms of the power and a strict compliance with it is essential to the valid
exercise of the power."). The purpose behind that requirement is easily discerned and simply
stated. It is to e11SlUe, for the benefit of the mortgagor whose equity interest is about to diminish
or disappear and who may face personal liability for the full amount of any deficiency, that a
sufficient number of likely bidders learn of the sale so that competition, and thus the highest
price, will result See Roche v. Farnsworth, 106 Mass. 509, 513 (1871) (''There is the more
reason for this [requiring strict adherence to the statute's notice provisions], where the power [of
, sale] is made to a mortgagee, who is interested merely for himself, and has opportunities for
collusion and for taking unfair advantage of the mortgagor. "). Underlying the notice
requirement is the notion that most of the interested and likely bidders will either live or work
locally or, if from afar, expect the local newspapers to carry the relevant notices.
The plaintiffs in these cases did not choose "a newspaper ... published in the town where
the land lies" or even, for that matter, the newspaper with the greatest local circulation. That
5
would have been, both these criteria, Springfield Republican. lnSteaa, they chose the
Boston Globe for reasons of cost and convenience. According to p"''''''''''''''''''''''''''
cotmsel, the Globe
has competitive advertising rates and legal notices advertising department able to
vv1\,J<:>lllj:; parties, acknowledge
receipt, and promptly publish notices. The record does not maleate. counsel did not know, if
Springfield Republican has rates or capacities.
G.L. c. 244, § 14, does not require publication in a locally-published
newspaper> in the neWspaper g:reatest circulation, or even on the day with the grea:test
circu1ation.
S
It is enough to publish "a newspaper with general circulation in the town where
the land lies .... " c. 244> § 14. The statute does not contain an .... ... ' ... definition of
circulation," none appears anywhere in relevant statutory provisions (those
governing and not directed the anenllcmto
decisions of our appellate courts. Thus, the familiar tools statutory inilern:retrtic,n
be interpJ.'eted to the of the Legislature
words by the ordinary of
language, considered connection with the eause of enactment, the
mischief or to be and the main object to be accomplished,
to the end that the purpose of framers may effectuated. Courts must
ascertain the statute from all its parts and from subject matter to
which it relates, and must interpret the statute so as to render legislation
effective, consonant with sound reason common sense. Words are not
defined a statute should be given usual and accepted meanings, provided
that those meanings are consistent with the statutory purpose. We derive the
words> usual accepted meanings from sources presumably known to the
statute's enactors, such as their use in other legal contexts and dictionary
definitions.
be
Seideman v. City of Newton, 452 Mass. 472, 477-78 (2008) (internal quotations and citations
5 The circulation data submitted for both the Springfield Republican and the Boston Globe show that their
Sunday editions have their readersbip. The notices in each cases were on = .. ,.,11'1'1,,',,<>
6
()
)
omitted).
Black's Law Dictionary is such a source. See id. at 478; Thurdin v. SEl Boston, LLC, 452
Mass. 436, 453 (2008) (both citing Black's). It defines "newspaper" as "a publication for
general circulation, usually in sheet form, appearing at regular intervals, usually daily or weekly,
and containing matters of general public interest, such as current events." Black's Law
Dictionary at 1069 (8th ed. 2004). ''Newspaper of general circulation" is defined as "a
newspaper that contains news and information of interest to the general public, rather than to a
particular segment, and that is available to the public within a certain geograpbic area." ld. The
Boston Globe met each of these tests in Springfield at the time the notices were published. It
was a "publication for general circulation" in Springfield.
6
It "contain[ ed] matters of general
public interest," such as national and international news, sports, and business coverage. And it
was available in Springfield on a daily basis during the times in question, both through
subscription and single-copy sales at stores and by
The Globe also was a newspaper that, for the times in question, met the statute's intent of
reaching a broad audience oflilcely bidders. While it had a fraction of the Springfield
Republican's circulation (the Republican sold somewhere between 21,959 and 24,733 copies in
Springfield on an average weekday during the relevant time period)/ the Globe's figures
(somewhere between 1,400 and 1,600 copies in Springfield during the relevant time period)8
were nonetheless significant and sufficiently "general" in the context of Springfield's overall
6 See circulation figures discussed immediately below.
7 The Republican sold 21,959 copies in Springfield on March 7, 2007, and 24,733 copies in Springfield on
March 28, 2008. Supplemental Aff. of Walter H. Porr, Jr. at Exs. A, B (Feb. 3,2009) (filed in the Larace case). On
March 7, 2007, it sold an additionalll.985 copies in the immediately adjacent towns of West Springfield,
Longmeadow and East Longmeadow. fd. On March 28,2008, it sold an additionalI4,720 copies in those same
adjacent localities. fd.
I The Globe sold 1600 copies in Springfield on October 24, 2006 and 1,400 copies in Springfield on October
23,2007. Aft: of Walter H. Porr, Jr. at Exs. B, C (Feb. 2, 2009) (filed in the Larace case). It sold an additional 896
copies on October 24,2006 and an additiona1674 copies on October 23, 2007 in the immediately adjacent towns of
West Springfield, Longmeadow and East Longmeadow. Id.
7
population at the times in question.
9
The Globe's status as one of New England's major
newspapers also makes it likely to reach a large, additional audience of institutional and other
bidders. 10. II
In short, while far from the best alternative, the Globe was good enough to meet the
statutory test at the times in question. It was "a newspaper with general circulation in the town
where the land lies" when the notices were published and thus sufficed under G.L. c. 244, § 14.12
Whether Publication Occurred in the Name Required by G.L. c. 244, § 14
G.L. c. 244, § 14 requires that notice of a foreclosure auction be given not only to the
mortgagor and "all persons of record" holding junior interests in the property (by registered
mail), but also by publication in a newspaper of general circulation at least "once in each of three
successive weeks, the first publication to be not less than twenty-one days prior to the date of
sale." The purpose of such publication, as previously noted, is to ensure, fcir the benefit of the
mortgagor whose equity interest is about to diminish or disappear and who may face personal
liability for the full amount of any deficiency, that a sufficient number qf1ikely bidders learn of
the sale so that competition, and thus the highest price, will result.
13
See Roche, 106 Mass. at
9 According to the U.S. Census data submitted by the plaintiffs, there were approximately 57,000 households
in Springfield during this time period. Id. at Ex. D.
10 This is also true of the Springfield Republican and, as shown by their comparative circulation data, even
more so in the Pioneer Valley area. Supplemental Aft: of Walter H. POrT, Jr. at Exs. A. B.
II The record did not indicate, and counsel did not know, if the notices at issue in these cases appeared
statewide or only in more localized editions of the Globe. For purposes of this Memorandum and Order, I make the
conservative assumption that they appeared only in an edition circulated in Springfield and the neighboring Pioneer
Valley area.
12 This ruling is not intended, and should not be construed, as a finding that the Globe meets the statutory test
in Springfield for any times other than those at issue in these cases. The droJroff in the Globe's circulation in
Springfield between Octobe2" 24, iOO6 and October 23,2007 (1,600 to 1,400 copies - a 12.5% reduction in a single
year from an already small figure) suggests that foreclosure notices published subsequent to October 2007 may need
to be assessed on a case-by-case basis.
13 It is also for the benefit of junior creditors, whose chances for recovery may be diminished or eliminated by
the foreclosure if there is are insufficient proceeds from the foreclosure to cover all liens. See G.L. c. 183, § 27
( ~
· ~ 7
(disposition of proceeds offoreclosure sale); Wiggin v. Heywood, 118 Mass. 514; 516 (1875); Pioneer Credit Corp. ._.,}
. v. Bloomberg, 323 F. 2nd 992, 993-94 (Ist Cir. 1963) (foreclosure of senior encumbrance discharges junior liens .
whose holders are made parties to the proceeding).
8
513. It is thus, broadly speaking, a consumer protection statute and, as the courts have
repeatedly made clear, one that requires "strict compliance" with its notice provisions. Bottomly
v. Kabachnick, 13 Mass. App. Ct 480, 484 (1982) and cases cited therein.
One of those requirements is that the notice identify "the holder of the mortgage." ld. at
.. . - -
483. Failure to do so renders the "sale void as a matter oflaw." ld. at 484. The purpose oftbis
requirement and the need for "strict compliance" is readily discerned. As even a cursory glance
at the current caseload of this court reveals, titles arising from mortgage foreclosures can have
many problems. These include the most fundamental: Did the party conducting the foreclosure
have the authority to do so and, if'challenged, can it prove that it had such authority? In short,
will a purchaser at the foreclosure sale get good title and will get it in prompt fashion? These are
increasingly important questions in the current deteriorating real estate market and are not small
concerns. It is increasingly rare for a mortgage to remain with its originating lender. Often, as
here, mortgages are assigned to other entities, and then assigned yet again into large securitized
pOOls.14 Often, as here, the paperwork lags far behind. Sometimes mistakes are made. 15
Mistakes can only be corrected., if at all, through confirmatory documents (which the borrower
may not so easily agree to) or litigation. With so many foreclosed properties available for
purchase, why bid on a property with even the possibility for such trouble? Why bid on a
property when the foreclosing party cannot produce all the documents (including proper
mortgage assignments in recordable form) that would give good title? Why take the risk that the
foreclosing party will be able to produce the documents promptly after the auction takes place,
14 In Ibanez, for example, the mortgage was originally granted to Rose Mortgage, Inc., then assigned to
Option One Mortgage Corporation, then assigned to American Home Mortgage Servicing, Inc., and then assigned to
the Structured Asset Securities Corporation Mortgage Pass-1brough Certificates, Series 2006-Z, of which U.S. Bank
is currently the trustee. Ibanez Complaint at 2, 'JI3. Larace and Rosario have similar histories.
IS See, e.g., LaSalle Bank National Association, as trustee for Merrill Lynch First Franklin Mortgage Loan
Trust, Mortgage Loankset-Backed Certificates, Series 2007-1 v. Truong, Land Court Misc. Case No. 390707
(, ' ") : (KCL) (assignment made, servicemembers action brought and judgment entered, G.L. c. 244, § 14 notices
published, foreclosure conducted, and foreclosure deeds issued in incorrect name).
9
that those documents will be complete and in proper form, or even (in this era of failed and
failing institutions) that the foreclosing party will still be in existence, with intact files and
knowledgeable employees able to find those files so that the proper paperwork can be
completed? Since these concerns°affect the ability to obtain clear, marketable title, why bid a
reasonable market value instead of a discount price to account for that risk?
None of this is the fault of the mortgagor, yet the mortgagor suffers due to fewer (or no)
bids in competition with the foreclosing institution. Only the foreclosing party is advantaged by
the clouded title at the time of auction. It can bid a lower price, hold the property in inventory,
and put together the proper documents at any time it chooses. And who can say that problems
won't be encountered during this process? It is interesting that it took the plaintiff (the
foreclosing party and successful bidder) almostfourteen months after the auction to obtain its
assignment in IPanez and ten months after the auction in Larace.
16
Would any reasonable third-
party bidder have been willing to wait that long, trusting that no other issues would arise?l7
Only in Rosario was the assignment (showing that the foreclosing party held the mortgage and
could convey title as a result of the sale) in hand and ready for recording at the time of the
auction sale.
The plaintiffs defend the validity of their post-foreclosure assignments (in Ibanez and
Larace) and post-foreclosure recording of their assignments (in all cases), making essentially
three arguments. First, they say that the language of G.L. c. 244, § 14 does not require fllat the
16 The foreclosure auction in Jbanez took place on July 5, 2007. Ibanez Complaint oat 3, 1 8. The mortgage
was not assigned to u.s. Bank until September 2, 2008. Id. at 2, 1 3. The foreclosure auction in Larace took place
on July 5,2007. Larace Complaint at 3, 18. The mortgage was not assigned to Wells Fargo until May 7, 2008. Id.
at 2,,3.
17 There may be an innocent explanation for the delay (Le., a rational business reason for waiting months to
( ~ )
document the assignment), but none was offered or apparent in the record. Moreover, such an explanation is
unlikely given the many months of delay, the deteriorating real estate market, the properties' carrying costs (upkeep,
security, and real estate taxes) and the bank's desire for cash. Surely, each of these was a powerful incentive to 0 ')
move as quickly as possible.
10
notice name the holder of the mortgage. They agree that the form of foreclosure notice included
(')
,:' in the statute contains that requirement explicitly (the signature line on that form is labeled
"Present holder of said mortgage" and its text contains both the representation "of which
mortgage the undersigned is the present holder" and the command "ifby assignment, or in any
fiduciary capacity, give reference"), but contend that these are not statutory requirements
because the statute permits "alter[ation] [of the form] as circumstances require" and does not
"prevent the use of other forms." G.L. c. 244, § 14 (Form).
This argument is unpersuasive, for three reasons. First, it ignores Bottomly v.
Kabachnick, which states that the notice in that case "was defective because it failed to identify
the holder of the mortgage, thereby rendering the first foreclosure sale void as a matter of law."
13 Mass. App. Ct at 483-84 (citing Roche v. Farnsworth, 106 Mass. 509 (1871) (emphasis
added).18. 19 Second, it ignores the "fundamental preceptO" that "[ c ]ourts must ascertain the
intent of a statute from all its parts and from the subject matter to which it relates .... "
DeGiacomo v. Metropolitan Property & Casualty Ins. Co., 66 Mass. App. Ct. 343, 346 (2006)
(emphasis added). The form of foreclosure notice included in G.L. c. 244, § 14 is a part of that
statute, indicative of its intent, and clearly contemplates (as Bottomly holds) that the present
holder of the mortgage be identified in the notice. There is nothing to indicate that this aspect of
JB Roche invalidated a mortgage foreclosure sale because the Dotice, inter alia, failed to Dame the holder of
the mortgage at the time of the foreclosure sale (defendant George B. Farnsworth). 106 Mass. 509,513 (1871).
This omission and the other failings in the notice were "inconsistent with the degree of clearness that ought to exist
in such an advertisement" Id.
19 One can become the "holder of the mortgage" (an interest in land) only by a Writing satisfying the statute of
frauds, G.L. c. 259, § 1, in recordable form. Thus, the plaintiffs' contention at oral argument that G.L. c. 244, § l4's
requirement of "holder" status was satisfied by the assignment of the promissory notes secured by the mortgages to
.the securitized pools (apparently done by contract documents referencing them generally, along with hundreds or
thousands of other such notes) fails. In any event, no such documents were included in the recortl, so any arguments
based upon them arc unsupported and waived. Moreover, there is nothing in the record to indicate when the
promissory notes were assigned and the record is unambiguously clear that the mortgages were assigned on the
dates referenced herein.
11
the notice could "altered.'.20 c. 244, § 14. ........... , ............... at oral argument, plamtim'
counsel conceded that the cmrent practice is to obtain and 1"P-i".I"\"'1'1 assignment
before publication and commencement foreclosure Third, the .......... "' ....... A .... the
body of the dearly contemplates that the "holder of mortgage" is the entity to
notice, as indicated by its reference to uv .... ,........,. to be mailed last address of the owner or
owners of the ...,.,,',,"' of redemption Q;fJl,ea:rtnf! on the rPrl'lrl':Jf' holder of the mi"1ria,'1a""
c.244, § 14 \ ............ .., ..... added).
second argument is the statute should read "in its practical
application, effect [to] uphold exercise of the ........... "" ... of sale even though
assignment
was recorded ;)C;;l;QIliU :S'llPJ)lernerltai Memorandum of
Law in Support J.YJ,VUVU for Entry of Default Judgment at 5 (Feb. 16,2009) (filed in
This argumerlt is in two parts. plaintiffs argue mortgagor "had ........... v ......
time and n ........... ",tT1,."ifv to exercise his foreclosure at it
was ongoing to do so." a
lawsuit on
mortgagor and allows a "'f'o'i"1.f'" ..... , violation potentially severe <In,,..,...,''''
consequences to unchecked if a lawsuit is not brought) to the
protection" nature statute. The mortgagor is unfamiliar with
law and legal and often resources to
counse1.
21
Second., plaintiffs' argument mortgagor already the identity
;ro Plaintiffs cite 146lhmdas Corp. v. Chemical 400 Mass. 588, 593 (1987), for the proposition that the
precise form of notice contained in G.L. c. 244, § 14 is not mandatory. True But the inclusion of that form
in G.L. c. 244. § 14 the Legislature's intent the contents the snggested
''the holder" of the to be a bla:nk line to
mOlrtga:ge is held by and there is nothing in that holds (or even
snggests) that snch an identification can be omitted. an alternate form of notice.
21 These cases are examples. None of the defendants ever came to court or filed a responsive pleading ..
even though they had meritorious defenses. There is no that the "waited until the owner may _
have added largely to the estate, or it has :increased in value a general [a claim for
as
mortgage his and cannot complain,
completely L ........ • .;".,,>
point the publication above, purpose is to
notify potential bidders do n.ot whose bids may chilled
concerns over foreclosing party's inability to in recordable form, an __ ",",,"' __ interest
.... "......,.r.rl'" to foreclose. upon facts chilling is not
speculative. two cases for which market information was provided (Ibanez
and Larace), the 1-' ..................... ... significantly less
that value (15% 17%, respectively). See discussion, supra at 3-4.
Even argument on a general .I.."..IL"J.u of "practical application,
purpose current shows, there is difficult or inhibitive in a
,' .... ''""''''f"IT that slgnm.ent documents place at and auction.
do now. documents must created, executed recorded
can pass so no additional or eXT:)eru;e is incurred by having
of publication auction sale. Having assignments in place recordable
form at publication and "'\..1." .... U'll avoids v.Lll.LU..IJl'; ejttects on bidding
above. statute in this manner thus not only comports with
inferred from that M ...... ,;'""'""'5'" but also with common sense and a rational policy objective.
See DiGiacomo, Mass. App. at 346 (statutes to
legislation efi,ectLve consonant with reason and common
third both case law practice support
their COIlteIltlCm <J.U'",U.U'll assignment, so as the ...................... ,'''' asSIgnee was
c. 244, § 14. I and discuss each this
----------
)
red'E:mIltlOlll." Montague v. Dawes, 12 Allen (94 397,400 (1866).
Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601, et seq.
22
13
Bottomly is the most recent case construing the notice provisions of the statute and is the
rurting point for the proper interpretation of the earlier cases and proper title practice. As noted
above, Bottomly unequivocally bolds that a notice that fails to identify the bolder of the mortgage
is defective, thereby rendering the "foreclosure sale void as a matter oflaw." 13 Mass. App. Ct.
at 483-84. None of the cases cited by the plaintiffs either bold or suggest the contrary.
The first case plaintiffs cite is Montague v. Dawes, 12 Allen (94 Mass.) 397 (1866).
Montague predates the publication provisions of G.L. c. 244, § 14, whicb were not enacted until
1 B77, so it is unclear what, if any, guidance it gives on the notice issue. 23.24 What it does bold,
and only bolds, is that title derived from a foreclosure sale by an assignee of a mortgage in
possession of that assignment at the time of the auction is not defeated by the fact that the
al:signment was not recorded until after the foreclosure took place, so long as the mortgagor is
aware of the assignment and it is ''unaccompanied with the suggestion that it was not recorded
23 The foreclosure in Montague took place under St 1857, c. 229, which allowed sales to take place with
"!:ueh notices' .. . as are authorized or required by such power [of sale in the mortgage deed]," so long as a copy of
tbat notice and an affidavit by the mortgagee "set[ting] forth his acts in the premises fully and particularly" were
filed in the registry of deeds within thirty days after the sale. The statutory requirement for published notice was not
enacted until 1877, which provided the following:
No sale under and by virtue of a power of sale contained in any mortgage of real estate shall be
valid and effectual to foreclose said mortgage, unless previous to such sale notice of the same shall
have bee:n published once a week, the first publication to be not less than twenty-one days before
the date of sale, for three successive weeks, in some newspaper, if there be any, published in the
city or town wherein the mortgaged premises are situa1'ed; but nothing herein shall avoid the
necessity of also giving notice of such sale in accordance with the terms of the mortgage.
St 1877, c. 215. It would not be SUlprising if it came about, in Part. as a result of the practices exemplified in the
filet pattern and condemned by the court in Montague v. Davis. 14 Allen (96 Mass.) 369, 374 (1867) ("Here the
notice proved ineffectual to attract purchasers, as might reasonably have been anticipated from the meagre:
information it contained. its irresponsible character, and the place of sale selected, remote from the premises to be
s,)lcl j.
2' 1 Although not statutorily required at the time, the power of sale in Montague apparently contained a
")
( \
'-</ .
( '., ...
")'
.. j :
publication requirement of some form or fashion. See Montague, 12 Allen (94 Mass.) at 400 (referring to "public
Dotice by advertisement of the time and place of sale"). The form and type of notice, however, was apparently never
placed in issue since the defendant "aver[red] that the notices and affidavit required by statute were duly made and
r::coided" and the plaintiff "nowhere charg[ed] that the sale was wrongfully made ... [or] that there was any .. )
ilTegularity in the proceedings." ld. at 399.
14
improper motives, or that in some way the circumstance actually affected the sale by
misleading purchasers or otherwise ... .'.25 Id. at 400. Thus, it is directly applicable to Rosario
(wbere the foreclosing party, LaSalle Bank, was correctly named in the notice as the bolder of
the mortgage and was ready, willing and able to produce its assignment, in recordable form, at
be time of auction) and inapplicable to Ibanez and Larace (where the named foreclosing party
l::,ad not been assigned the mortgage at the time of notice and auction, either on or off record).
The plaintiffs next cite the Rule 1 :28 Memorandum and Order in Federal Deposit
Corporation v. Kefelas, 62 Mass. App. Ct. 1121,2005 WL 277693 (2005), for 'the proposition
tbat the foreclosure notice need not contain the name of the holder of the mortgage in order for
the sale to be valid. As a pre-February 26, 2008 unpublisbed opinion, Federal Deposit
Corporation has no precedential value. Order Amending Appeals Court Rule 1 :28 (Nov. 25,
Even so, wben closely examined, Federal Deposit Corporation does not reflect the
holding plaintiffs cugue. The notice in that case stated that the Bank of New England (''BNE'')
was the mortgage holder when, in fact, that bank had failed and substantially all of its assets
(including the Kefelas mortgage) had transferred to a "bridge bank," New Bank of New England
(''NBNE''). Federal Deposit Corp., 2005 WL 277693 at * 1. The Appeals Court failed to see
why, under these circumstances, "the change in name was significanf' and thus refused to
invalidate the foreclosure sale. Id. at 2-3. Ibis is completely consistent with Bottomly. NBNE
was, for foreclosure purposes, effectively the same entity as BNE and, given the general
1nowledge that BNE bad failed and its assets acquired by NBNE, likely no one could have been
confused or had their bid chilled.
25 Samuel Rice, the original mortgagee, assigned the note and mortgage to Henry Dawes on June 19, 1862.
:1'.11'. Dawes conducted the foreclosure sale on August 1.1, 1862, after he was assigned the mortgage, and conveyed
property to John Dunbar, who purchased it at Dawes' request. Dunbar then conveyed it to Dawes on August 20,
] 862. Dawes later conveyed it to a Mr. Hassam, who conveyed it Lydia Hawes. The case involved the mortgagor's
(George Montague) attempt to redeem the property, which the court denied.
15
The final citation is Title Standard No. 58, "Out of Order Recording
Mortgage Discharges and Assignments.,,26 It provides, in relevant is not defective
by reason of ... (t]he recording of an Assignment of Mortgage executed either prior, or
subsequent, to foreclosure where said Mortgage has been foreclosed, of record, by the
Title Standard No. 58. The accompanying note states that this portion of the
standard based on Montague v. Dawes, 12 Allen 397 (1866)." Id. (Comment). No
explanation is given and no authority other than Montague is cited or discussed. So far as I can
teU, this aspect of REBA Title Standard No. 58 has never been reviewed or ruled upon by a court
at any level. I have great respect for REBA and the work of its committees, and the initial
portion of its standard is certainly a correct reading c. 244, § 14 and Montague ("[a] title
is not defective by reason ... [t]he of an Assignment of Mortgage executed ...
. . . to foreclosure .... "). But the latter portion (relating to assignments made after notice
hI published and sale has occurred) misconstrues the statute, the holding in Montague, and the
;..a. ..... LJ.U..t,i'>" of Bottomly and Roche. As discussed above, c. 244, § 14 requires publication
name of the holder of the mortgage for the foreclosure sale to be valid. Bottomly, 13 Mass.
App. ct. at 483-84. It does so to assure potential bidders the party can promptly
deliver good and to prevent "opportunities for collusion and taking unfair advantage of
the mortgagor." Roche, 106 Mass. at 513. The best of course, is to put the
assignment on record prior to notice publication so it is available for all to examine. At the very
the assignment should be fully executed and available, recordable form, at the time of
foreclosure sale. Montague, 12 at 400. To allow a party, any
mterest in the mortgage at the of sale (recorded or unrecorded), to conduct the sale in
these bid, and then acquire good title by later assignment is completely contrary
26
REBA is 'the Real Estate Bar Association for Massachusetts, a private organization.
16
- , ( )
to G.L. c. 244, § 14's intent and commands.
Conclusion
For the foregoing reasons, none of the three foreclosures at issue in these lawsuits were
rendered invalid because notice was published in the Boston Globe. LaSalle Bank's foreclosure
in. Rosario was not rendered invalid by its failure to record the assignment reflecting its status as
bolder of the mortgage prior to the foreclosure since it was, in fact, the holder by assignment at
tb.e time of the foreclosure, it truthfully claimed that status in the notice, and it could have
produced proof of that status (the unrecorded assignment) if ask;ed.The other two foreclosures
(U.S. Bank's in Ibanez and Wells Fargo Bank's in Larace) are invalid because the notices
(which named those entities) failed to name the mortgage holder as required by G.L. c: 244, § 14.
Judgment shall enter accordingly.
Dated: 26 March 2009
Deborah 1. Patterson, Recorder
17
ATRUECOPY
AliEST:

RECORDER
COMMONWEALTH OF MASSACHUSETTS
THE TRIAL COURT
·_------- ------ -----_ .. _--,-
LAND COURT DEPARTMENT
.. .. ---. - .
. --_._- ---_. _-- ------ . . _-- . , ._- ,- . _- -
)
U.S. BANK NATIONAL ASSOCIATION, )
fot the Structured Asset )
:;ecurities C()rporation Mortgage Pass- )
.. , .. ' Through Certificates, Series 2006-Z, )
v.
ANTONIO IBANEZ,
Plaintiff,
Defendant.
)
)
)
)
)
)

\iiTELLS FARGO BANK, N.A., as trustee
. fi)r ABFC 2005-0PTl Trust, ABFC Asset
E acked Certificates Series 2005-0PTl,
Plaintiff,
v.
1v[ARK A. LARACE and TAMMY L.
LARACE,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
08 MISC 384283 (KCL)
08 :MJSC 386755 (KCL)
MEMORANDUM AND ORDER ON THE PLAINTIFFS' MOTIONS TO VACATE
JODGlVlENT
1
Introduction
Each of the above-captioned cases,
2
along with a third that was previously coordinated
I wish to thank the parties and amici who l1lade submissions in connection with these motions. Briefs for
the parties were submitted by Walter Porr, Jr. of Ablitt Law Offices, p.e. (for the plaintiffs/J:rioving parties in both
Paul Collier ill, Max Weinstein of the WilrnerlHale Legal Services CenterofHarvarq Law School, and
Eloise Lawrence and David Dineen of Greater Boston Legal Services (for defenciant Antonio Ibanez); and Gleun
Russell, If. (for defendants Mark and Tammy Larace). Amici briefs were submitted by Reneau Longoria of Doonan
Graves & Longoria LLC; Marie McDonnell of Truth in Lending Audit & Recovery Services LLC; Edwprd Rainen,
Ward Graham, Martin Haller and Robert Moriarity, Jr. for the Real Estate Bar Assooiation for Massachusetts;
Kevin Costello, Gary Klein and Shennan Kavanaugh bfRoddy Klein & Ryan; and Robert Hobbs of the National
Consumer Law Center.
2 Us. Bank National Association, as trustee for the Structw-ed Asset Securities Corporation Mortgage Pass-
with but is not a foreclosure ofa
that was noticed and conducted . any record
mortgage at notice and sale. In notice was published in Boston
Glob€? the
bidder at the In the plaintiff purchased
. appraised value, wipitig out all
equity in one 'with a not
have
"nT'"r' ..... p,rhr sold for
In ..... U. could

the title it purportedly r"'£',CMH,,.n that thus
to a from
title" of the n"''-'.1'"\","1"1 c,
§
UVc>CVu. t6 remove cloud was the same in "that
adjudge
<') IS no that of
was published
title is (inlbanez) Wells Fargo
Through Certificates, Series 2006-Z V. f1l1"un"u (hp',-p.,,·ft"' ... "Ibanez"); and
Wells NA., as Series 2005-0PTl
v MarkLarace and Case No. "Larace").
LaSalle Bank National Association, trusiee for the certificate of Bear Stearns Asset Backed
S?:curities L LLC Asset-Backed Certificates Series 2007-HE2 v.. Rosario, Misc. Case 08-386018 (KCL)
The for the were the same in of the three cases and their motions for
""',J.lc;.uU.1C;U and heard together. Neither the ",,-,,,,'-'llU.al.l'
Jungm.ent in tliat case.
difference was the name of the plaintiJff
5
"' .... so referenced
entitled to the benefits of the Servicemembers'
o1her of the was addressed in
2
dej:en(iantiec[uitj holders were not
385 No
and relief as the and
"
Complaint at 3-4, (Sept. 12, 2008); Larace, 1-4 (Oct.
2008); Rosario, 1 (Oct. 17,2008). None of the ever
was ever or modified, and none four requests
ever UL\.fU.L.LL or
and Larace each the same two substantive for v"VULW,VLL. both
c. § 14 (foreclosure power notice; fonn): (1)
was Boston Globe, ill were published, a
circulation in the
§ 14 "Boston themselves
p:rrased plaintiffs have right ... to foreclose the
foreclosed into the or
rEcorded
2009)
vCLLfJ.LL<.LQkC> added); Larace, Entry of Default 2(09)
(same).7 Both were at cases and both were
6
Estate in both Ibanez and the plaintiffs (U.S, Bank in
to be "the present holder of said
issue" was in a different form in Rosario. There (as
see Memorandum and Order on Plaintif:fS' Motions for ofDefauIt Judgment at 14-17 (Mar. 26,
20C'9)), a mortgage to the foreclosing party in recordable form had been executed, but it was not
recorded to the notice and sale. Thus, the issue as phrased in Rosario was whether the plaintiff had "the light .
. . to foreclose the mortgage in light of the fact that the of the foreclosed into the
Plaintiffwas not after the exercise of the power of sale." Plaintiffs Motion
Default 2,2009) added). As the court's Memorandum reflected, MaSsachusetts law
that a party have a valid assignment of the at the time of notice and but it
the to be "of record" at that time. and Order on for
at 14" 11_ the foreclosure sale in Rosario was valid and the sales in Ibanez and Larace
3
and argued by the p"U.L.LLLLLL connection with default
8
Boston Globe was resolved favorably to
'Ofthe three rendered invalid
was published in 2009). The "present
issue,"
in thecomp la,ints otrthe plaintiffs
c. 1, § 87) showed u.s. Bank (in Ibanez) nor Fargo (in
.L,J.V,J.u.v .. of the mortgage on or offrecord) at the of the foreclosure was
or at the time According to both were
after occurred.
9
as a matter
were invalid. See and Order on for Entry
,.<u.!"',k.L,V.U.L at 2-4, 8-17 (Mar. 2009). Final judgment was making that
LUJ;UL,J.V.LI.L (Mar. 26, 2009).
Bank (in Fargo (in Larace) now timely moved to vacate that
the "present LLV.U ....
See Ibanez, Plaintiff's Motion for Entry of Default at 1-2 2009), oral argument of
mJtion (Feb. 11,2009) and Plaintiff's Supplemental of Law in Support of Motion for
Judgment at 1-2 16, Larace, Plaintiffs Motion for of Default Judgment at 2
2(109), oral argument of motion 11,2009), and Plaintiff's Memorandum of Law in
"'""'''rTofMotion for Entry of Default at 1-2 (Feb. 16,2009); and Rosario, Plaintiff's Motion
ofDefuultJudgment at 1-2 2,2009), oral argument of motion 11,2009) and Plaintiff's Second
Stt]Jpl.em.ental Memorandum in of Motion for of Default at 1-2 (Feb.
The issues were addressed in the conJext of a motion for because the defendants ill
and Rosario each had been defaulted for failure to to the complaints. The defendants
in Ibanez and Larace have entered an appearance through counsel and oppose the
the notices in Ibanez were and
2007 for auctions that on 5,2007. Ibanez, at 2, 'If 5; 3,18; Larace, \.Al:rnplillIlL
B. The Ibanez notice U.S. Bank as the foreclosing party, the Larace notice named Wells
ro::,eCl()Slllgparty, and the were conducted in their names. Ibanez, Complaint at 2, 'If 5; 3,
, Complaint at 2, 'If 5; 3, '1i 8. A2, established by the in the Complaints, U.S. Bank
was not assigned the Ibanez until September 2,2008, months after the sale (Ibanez, ..... VU.l!JH1.ll1L
2, and Wells Fargo was not the Lamce mortgage until 7,2008, ten months after the sale
at 2,13).
4
10
cases.
would
IS so,
came as a surprise to them not
U,,",,"V.W-', they argue that had they known
their case differently and either limited
supplemented their evidentiary
defaulted,12 it was inappropriate
motion for
try
13
H).H.'V,", post-judgment,14 they
meaning of G.L c.
possessed the note
(i.e., without an identified assignee),
15 Fifth, in the event the court
a U."'"'-lF,JCLLHVUC in blank, and a contractual
were
10 .
See
(A)r. 6, 2009).
II ld.
contend the forecI'osure
Jast record holder the
reasons more fully set forth below,
plaintiffs cannot credibly
(and received) a on
Motion to Vacate Judgment at 3,4 (Apr. 6, 2009);
the defendants have since each entered an
connection with
addressed, they
the "Boston
they insist that since
__ ,..,. .. _ .. _ to be entered agaittst the
denied with
new arguments
of the
the
to obtain the
"present holders
valid because theX
as the "af!ent"
"
I thus DENY
they and on the
Motion to Vacate Judgment at 3, 4
... • .u. counsel.
12
13
14
to Vacate Judgment at 7; Larace, Motion to Vacate W-UI',J.UvUL at 7.
U-U),;,LUv,U.' evidentiary submissions were allowed leave of court Notice of Docket
Notice of Docket Entry (Apr.
<-v .... vvuev, n.,u,p'upr that the mortgage assignment
to
document,
5
r ,
facts exactly as they pled them, they have no right to a "do-over" because the declaration was not.
entirely as they wished. Moreover, their newly-presented facts do not lead to a different result
Instead, they-show that the plaintiffs themselves recognized that they needed mortgage ·· .
c.ssignrnents in recordable fonn explicitly to them (not in blank:) prior to their initiation of the
.. . . ,
- - ; :..: - - .- _., . . ;
foreclosure process, that the plaintiffs' "authorized agent" argument fails botb. on its facts and as
2. matter of law, and reaffirm the correctness of the original judgment. They also show that the
problem the plaintiffs face (the present title defect) is entirely of their Own making as a result of
tb.eir failure to comply witb. the statute and the directives in their own securitization documents.
put, the foreclosure sales were invalid because they failed to meet the requirements of
O.L. c. 244, § 14. What the plaintiffs truly seek is a change in the foreclosure sale statute (G.L.
C" 244, § 14), which can only come from the legislature.
Analysis
The Plaintijft Were Not Surprised That Their Status as Mortgage Holders at the Time o/Notice
and Sale Would Be an Issue in Connection With Their Motions for Default Judgment
The plaintiffs cannot credibly claim they were SUrprised that their status as mortgage
holders at the time of notice and sale would be an issue in these cases. Nor can they be surprised
that a judgment might be entered against them on that issue. The relief they included a
broad declaration that the defendant/equity holders' right, title and interest in the properties at
i::sue was extinguished by the judgments in the Servicemembers' cases and the execution of the
powers of sale contained in the mortgages. They further sought a declaration that title in fee
simple was vested in the plaintiffs as a result of those sales.
16
This necessarily involved their
It Ibanez, Complaint at 3-4, 1-4 (Sept 12,2008); Larace, Complaint at 3-4, mJ 1-4 (Oct 23, 2008); see
a'so Ibanez, Motion for Entry of Default Judgment at 8 (Jan 30,2009) ("plaintiff moves the Court for entry of
jl!dgment thereby order[ing), adjudging and deCreeing that defendant's right, title and interest in the property was
e:(tinguished by the judgment Oll the complaint to foreClose mortgage and the execution of the power of sale
contained in. the mortgage by plaintiff'). The plain.tiffs' current argument that these actions "presented only one
6
with c.?44, §.14 they
v. (1982); v.
Savings Bank, (1936) and cases cited therein.
The stated L.1.!,CLF!,C'" V'JU,.Gk".u.U5 the power
. were to the United
Bankruptcy previously
mortgage not satisfY statute [O.L. c. § 14].
defIned to U· AVH __U.V assIgnees a ill the
current is nothing to that one
assignment foreclosure
" In re Sima .,,,.,,,.)',""'7
D.
Chap. 7 No. 06-42476-JBR, Memora.ndUJJ1 Relief at 7
(Apr. 19,2007). plaintiffs were requested to address this' connection their
motions of those explicitly that this
had been and to argue the at length.19 In
the plaintiffs
is:me: was the Boston Globe a circulation in for purposes of G.L. c. 244, § 14 for
prrposes of the subject (Ibanez, Motion to Vacate Judgment at 4 6,2009); Motion to
Vacate Judgment at 4 6, 2009» is thus without basis.
17 See n. 9, supra. their motions for entry reaffirmed this fact Ibanez, Motion
fo r of Default at 2 ("the of the foreclosed was not executed or
re,;orded until after the exercise of the power Motion for Entry of Default Judgment at 2 2,
2009) ofthe foreclosed mortgage was not executed or recorded until after the exercise of the power
of sale"). The court's judgment assumed these facts to be true and, itself to these and the other facts
in the ruled accordingly. Prudential-Bache Inc. Y. Comm'r 412 Mass,
249 (1992); Ltd. v. 63 Mass. 79,82 n. 8 (2005); see also v. American
Felt 343 Mass. 336 (1961). The current that "the court lllldertook to adopt facts and
m,ke rulings of law outside the scope of the pleadings and the record before it" Motion to Vacate
at l-2; Motion to Vacate at 1-2) is thus without basis.
1& "Sua sponte, the Court has also raised an aUUL.LLIU'llQ.!
mortgage in light of the that the ""'''!!>llLUv.Ut
or recorded exercise of
uctg;roe:nt at 2 Larace,
!9 Ibanez, Motion for Entry ofDefuult at 5-6
oL,aw in of Mation for of Default Judgment at 1-8 16,2009); Motion for
Default at 5-6 (Feb. 2, Second Memorandum of Law in Support
uu;;,u .. ...,,,. at 2-8 16,2009); see argument (Feb. II, 2009) \
7
were not surprised in the slightest that the "present holder of the mortgage issue" would be
addressed in the court's ultimate resolution ofthe case and cannot credibly argue otherwise.
Having Requested Cl Broad DeClaration That They Held Fee Simple Title as a Result of the '
Foreclosure Sales and Having Been Put on Notice That Their Status as the "Present Holder of
the Mortgage" at the Time of Notice and Sale Was an Issue In Connection With That
Declaration, the Plaintiffs Cannot Now Narrow That Request and Vacate the Part of the
. . . . Judgment That They Dislike · ....... ' ... ..
i1:sue, a litigant cannot wait for the come s decision and, if dissatisfied, amend its pleadings to .
remove that issue. See Johnston v. Box, 453 Mass. 569 (2009) (denying motion to amend after
complaint had been dismissed). The principle behind this is simple and fundamental. Litigants
are expected to "investigate their claims before filing a complaint so that they have a basis at the
oatset to make particularized factual allegations in the complaint." Id. at 575, n.11 (quoting
White v. Panic, 783 A.2d 543,555-56 (Del. 2001)). Likewise, when a plaintiff requests a
declaration of the parties' rights as its prayer for relief, it has no grounds to object when that
declaration is made, even ifit is different from the one it desired. Bright v. American Felt Co.,
. 343 Mass. 334, 336 (1961) ("The decree taking the petition for confessed did not ensure a decree
for the petitioner. It only established as true the facts properly pleaded, and required the entry of
whatever decree those facts demanded. ") . . If the plaintiffs wanted something different or
mrrower than what their complaints requested, they were obligated to say so explicitly.
The plaintiffs' complaints requested two broad declarations. First, they sought a
that the defendant/equity holder's rights in the property were totally extingaished by
the foreclosure sale. Second, they sought a declaration that, as a result of that sale, the plaintiffs
n)w held fee simple title. Those requests were never amended or withdrawn, in whole or in part.
Having been asked to declare the parties' rights and with nothing in the record showing
recorded).
8
to did so.
G. lA, §§ 1-2.
to a Judgment, Not a
Default Situation, to Give a Judgment Favorable to the Moving
presented
complaint. Ltd. v.
63 But court is not bound by the
c:onclusions Jd. "has to enter m
of the facts even in the absence of a contest hp.1'"Arp that
judgment to the
(1992); Bright, 343 argue it Was
an The facts alleged
c:omplaints (a post-notice, taken as true,
as Those Memorandum Order'
en Plaintiffs' 26,2009).
to on
to vacate the judgment could be uvlJu.vu.
analysis outlined above. The were
matters at and the
sought 'The
20
".1.<:;;;,-,,,,,,,,, or recorded until the exercise
udg;me:nt at 1-2 2009) (emphasis
2, '2009) (same).
9
but were on filII
of which were ill
court was on facts
Plaintiff to
into the
Plaintiff's Motion for
of Default
in their complaints, and solely on those facts?l The plaintiffs were given full
I)Pportunity to make their case, factually and legally, at the time they briefed and argued their
.. ','
motions for entry of default judgment. Indeed, they were given (and took) the opportunity to file
memoranda even after oral argument. The law has not changed and the judgment
was a straightfofW'ard application of the law to the facts as the plaintiffs pled them. See
- .. "- '" - .
21 The plaintiffs' argument that I went outside the pleadings to make "findings" regarding the foreclosure
icUctions and the subsequent months-long delay before the plaintiffs received assignments of the mortgages is, once
<.gain, completely without basis. The actual facts recited (the appraised value of the properties, the amount of the
mortgages, the amount of the plaintiffs' bids, the fact that plaintiffs were the only bidders, and the fact that the
plaintiffs took months to prepare and execute the assignment documents) came directly from the plaintiffs'
pleadings and (with respect t9 the plaintiffs being .the only bidders) from the plaintiffs' admission at oral argument
Tiley were con.firmed, once again, in their motions to vacate. Ibanez, Motion to Vacate Judgment at 19; Larace,
Motion to Vacate Judgment at 19. The further discussions based on those facts (the likely chilling of other bids due
t:> the plaintiffs' inability at the time of sale to show (by proof of a valid mortgage assignment) their legal capacity to
convey title and the consequent damage to the borrower) were not "factual findings" per se, but rather (by fair
bference) a demonstration of a rational basis for the statutory requirement that the party conducting the sale have a
yalid mortgage assignment in recorda,ble form and in its possession at the time of notice and sale. Moreover, the
plaintijft; own post-judgment submissions have made the soundness of these discussions even more apparent. It
t)ok the plaintiffs over two months after they filed their motions to vacate the judgment (from April 6 to June 8,
2009) to gather the documents that they believed were necessary to show their status as PUIportedly valid assignees
cfthe mortgages at the time of the notice and sale. The reasons they gave for needing that time (what they
dlemselves described as "the problem") are telling - "the size of the dOCUlllents themselves," "the number of
documep:ts which must be taken together to capture the entire transaction," "the fact that some of the doouments
conta,in industry sensitive and confldential business practices information" (if so, none were produced), and
"[f]inally, the economic crisis itself [which] has impacted both the Custodians of these documents (the Trustees for
dIe Securitized Trusts or their designee) and the loan servicers employed by them (increased foreclosure workload
compounded by decreased staffing due to financial losses) ," Ibanez, (plaintiff's] Motion for Extension of Time to
File Third Supplemental Memorandum of Law in Support of Motion for Entry of Default Judgment at 5 (May 27,
2009); Larace, [Plaintiff's] M<;>tion for Extension ofTiine to File Third Supplemental Memorandum of Law in
Support of Motion for Entry of Default JudgmBnt at 5 (May 27,2009). This does not inspire confidence. Indeed,
many of the documents were never produced. Moreover, left unsaid (and equally telling) is the fact that the major
eatities now revealed as to these transactions are presently either in bankruptcy (Lehman Brothers), out of
business (Option One Mortgage Corporation, some of whose assets were sold to AH Mortgage Acquisition Co., Inc.,
now renamed American: Home Mortgage Servicing, Inc.), or required billlons of dollars in government aid (Bank of
America). It is sw:elya fair inference that this would make potential bidders even more unwilling to bid (or sharply
discount their bids) without the plaintiffs' ability to show iliat they were valid "holders of the mortgage" and thus
able to convey title at the tiine of the sale. How else would they have any assurance that potentially critical
d)cuments and authorizations could be obtained in timely fashion thereafter? See Memorandum and Order on
Plaintiffs' Motions foi Entry of Default Judgment at 9-10.
In any event, no factual demonstration Ofrationalitywas needed to uphold the statute (G.L. c. 244, § 14)
since its rationality is apparent ou its face. A mortgage is a contract It is fuiJ.damental arid basic that a party seeking
to exercise a cOIitractual right (here, the power of sale) has the contractual right to do so at the time of its exercise.
As the statute recognizes, iliese are ilie mortgagee or his valid assignee, a person specifically authorized by the
power of sale, or an attorney, legal guardian or conServator of those persons acting in the name of those persons.
&e McGreevey, 294 Mass. at 484 (''It is fanllliar law that one who sells under a power must follow strictly its terms.
If he fails to do so there is no valid execution of the power and the sale is wholly void"); see also G.L. c. 183, § 21
('statutory power of sale" in mortgage, recogniplig that person seeking to exercise the power must "first complyO .
with the terms Of the mortgage and With the statutes relating to the foreclosure of mortgages by the exercise of it
power of sale").
10
Memorandum and Order on for Entry ofOefa].llt JudgmeD-t 17.. .. __ . _ ...
others, that the plaintiffs' new facts and new arguments be addressed on their merits since they
are alleged to be common to many securitized 10ans.
22
In essence, the plaintiffs argue that those
facts -. none of which were on record at the Registry at the time of notice and sale, all of which
require a close reading of a complex set of securitization documents, and many of which lack
proper evidentiary support
23
- show them to have been "the mortgagee or person having his
[the mortgagee's] estate in the land mortgaged" at the time of notice and sale or, in the
c.itemative, that their foreclosure was valid because they acted at the direction (although not in
tb.e name) of an alleged agent "of such mortgagee or person." G.L c. 244, § 14. Even taking the
flew facts as the plaintiffs allege them as true, however, does not change the result in this case.
As discussed below, the plaintiffs were not the present holders of the mortgage at the time of the
Ilotice and sale. They were not properly authorized by the mortgage holder at those times. Even
iXtheir counsel were acting at the direction of an agent for a party that, in another capacity,
coincidentally was the mortgage holder, the notice and conduct of the foreclosure sale in the
plaintiffs' names under the incorrect representation that the plaintiffs were the mortgage holders
makes the sales invalid. And, for the reasons previously held, retroactive assignments, long
after notice and sale have taken place, do not cure the statutory defects.
22 I am puzzled at this since, as noted above and discussed more fully below, the plaintiffs' own securitization
documents required mortgage assignments to be made to the plaintiffs in recordable form for each and every loan at
the time the plaintiffs acquired them. Surely, compliance with this reqUirement would (and certamiy should) have
been a priority for an entity issuing securities dependent on recoveries from loans, such as these, known from the
stm to have a bigher than normal risk of delinquency and default See Structured Asset Securities Corporation
Mortgage Pass-Through Certificates, Series 2006-Z Private Placement Memorandum at 21-43 (Dec. 26, 2006)
(hereafter "Ibanez Private Placement Memorandum") (discussion of "Risk Factors"); ABf'C Asset-Backed
Series 2005"OPTl Prospectus S.upplement at S-14 -,- S-25 (Oct 27, 2005) (hereafter "Larace ProspectUs
Supplement") (discussion of ''Risk Factors").
23 See Memorandum of Antonio Ibanez in Opposition to Plaintiffs Motion to Vacate Judgment at 1-27 (JUD..
2S,2009).
11
The Facts As Newly Supplemented
In relevant part, if taken as alleged, the facts in Ibanez and Larace are roughly parallel - _
and, can be summarized as follows.
24
Both Ibanez and Laraee involved adjustable-rate, subprime loans for the purchase of
resiq.ential property in Springfield?5 , In both, the borrower signed a promissory note and gave an
immediately-recorded mortgage to the original lender (Rose Mortgage in Ibanez, Option One'
M-ortgage Corporation in Larace). In Ibanez, Rose endorsed the note and properly assigned the
mortgage to Option One?6 In both Ibanez and Laraee, Option One then executed an
endorsement of the note in blank, making the note "payable to bearer" and "negotiated by
transfer alone until specially endorsed." G.L. c. 106, § 3-205(b). In both, Option One also
executed an assignment of the mortgage in blank (i.e., without a specified assignee) (hereafter,
the \'blank mortgage assignments"). These blank mortgage assignments were never recorded and
they were not legally recordable. G.L. c. 183, § 6C (for a mortgage or assignment of a mortgage
to be recordable in Massachusetts, the mortgage or assignment must "contam or have endorsed
upon. it the residence and post office address of the mortgagee or assignee if said mortgagee or
assignee is a natural person, or a business address, mail address or post office address of the
or. assignee if the mortgagee or assignee is not a natural person").' Moreover, since
the blank mortgage assignments failed to name an assignee, they were ineffective to transfer any
24 In light of my rulings on these motions, I need not and do not decide if each of these facts (other than those
cppearing in the Registry records) is true. The defendants have noted many that lack proper evidentiary sup-port in
tb.e present record (see, e.g., n, 23, supra) and they argue that now that they have entered appearances, it is
inappropriate to enter a judgment against them in any way dependent upon these challenged facts.
25 ' Subpriroe loans are those that "do not meetthe cUstomary credit standards ofF3nnie Mae and Freddie
Mac" and are made to borrowers "that typically have limited access to traditional mortgage financing for a variety of
reasons, including impaired or limited past credit history, lower credit scores, high loan-to-value ratios or high debt-
to-income ratios." Larace Supplemental Prospectus at S-14. "AB a result of these factors, delinquencies and
liquidation proceedings are more likely with these mortgage loans than with mortgage loans that satisfY customary
credit standards." Id. .
26 Tbis assignment of the mortgage was duly recorded at the Registry.
12
27 _Flayin Morrissey, ); v.
:225 341, (191 w. Practice: Estate §
at 1 09 (4th ed. 2004) therein.
The Option
in Ibanez and America Lm'ace.
In
Lehman Krn,rnprC'
and vLL'''-C)'"U the from
One Le!ummthen it (with
Option to wholly-owned
Corporation "Depositor") .
loans to
Trust 2006-Z (with
as a "pool"
pool")
and subordinate) with varying -rates
of their payout priority in event of
tne as the and sold in an offering to
c investors.
loans in pool were UU,UllJlU", ,""pr·",r"".,..", "one ofwruch was
One (now a different capacity Originator) ?9 One is to
This is so because Massachusetts follows the "title a type of deed.
L.P. v. Ed. of Dennis, 75 Mass. App. Ct 264-265 (2a09) our
mortg.age;s, of real estate is a conveyance of the title or of some interest therein defeasible
performaJlce of some other condition. the of
tnn.rl"",.,.p·""to the land as for the
and revests the
L2JnSon & Co. v. Abrams, 305 Mass. (1940) grants
nvp'Xlnr.\' 75 Mass. Ct at 265-266 and cases cited therein is "conveyance m fee," a "deed
MacFarlane v: Thompson, 241 Mass. 486,489 (1922); Adams v. 78 Mass. 53, 53
that this is the same entity as the plaintiff in Ibanez and that the hJ.l""'UUlJ., was misnanled
The Ibanez Private Placement is
"Servicers" the reasons for that separateness. see Private Placement Memorandum at
barrier intended to the status as a m
13
the Servicer for the Ibanez 10an.
3D
These Servicers were supervised by Aurora Loan Services
LLC (a wholly-owned Lehman subsidiary) (the "Master Servicer"). The loan documents
themselves were kept by "Custodians" - . Deutsche Bank, Wells Fargo, or U.S. Bank.
3
!
Assuming that events proceeded in the Way described, the Ibanez loan thus changed
. - . "
• • P' •• - - - __ . -----:.... • ..:..:.... •• - , ' -- -..: ~ . : . _ •• ....!... -- - _ •.
O'Nllership at least four times prior to foreclosure - Rose Mortgage to Option One, Option One
to Lelnnan Brothers, Lehman Brothers to Structured Asset Securities Corporation, and
S·tructured Asset Securities Corporation to Structured Asset Securities Corporation Mortgage
Loan Trust 2006.:.Z (with U.S. Bank as trustee) - without any of this appearing on the public
record. Two of those entities (Lehman Brothers and its subsidiary Structured Asset Securities
Corporation) are currently in bankruptcy and a tbird (Option One) has ceased operations.
32
The
fl'anez note, Rose's endorsement of the note to Option One, Option One's endorsement of the
nQte in blank, Ibanez's mortgage to Rose, Rose's assignment of the mortgage to Optlon One, and
Option One's blank mortgage assignment were all placed into a "collateral file" and,
presumably, were passed from hand to hand along the chain of entities just listed, ending with
the Custodian. The note (endorsed in blank and thus "bearer paper") was negotiable by
whichever entity possessed it. Since the blank mortgage assignment was ineffective, the
mortgage remained with Option One (as Originator).
In Larace, Bank of America (as "Seller") purchased the loan from Option One (as
Originator). Bank of America then sold it (with hundreds of other loans that originated from
Option One and other sources) to its wholly-owned subsidiary Asset Backed Funding
it from claims of fraud, misrepresentation., etc. in the making of the loans).
30 There is no admissible proof in the record to establish this, b u ~ as with the other facts set forth herein, I
asSume it to be true for the purpose of these motions.
31 Both this and the Larace structures seetn oddly complex, particularly when so maily of the entities are
effectively the same (either Lehman Brothers or its subsidiaries in Ibanez and either Bank of America or its
subsidiaries iriLarace). But see n. 29, supra.
32 Massachusetts Secretary of State;s Office, Option One Mortgage Corporation, Foreign Certificate of
Withdrawal (Jul. 14,2008). .
14
Corporation (the "Depositor"). Asset Backed Funding Corporation then sold the loans to the
ABFC 200S-0PTl Trust (with Wells Fargo as trustee)33 (the "Issuing Entity"), which gropped
t ~ e m into a "pool" (the "Lm"ace pool") and issued fourteen classes of certificates (two super-
senior, three senior, and nine subordinate) with varying rates ofretum, ranked in order of their
payout priority in the event of shortfalls. Bank of America Securities LLC (as "Underwriter")
rurchased the certificates and sold them in an offering to the public. The loans in the Lm"ace
fool were administered by Option One as "Servicer" (again, as in Ibanez, acting in a different
capacity than Originator).
Assuming that events proceeded in the way described, the Larace loan thus changed
ownership at least three times - Option One to Bank of America, Bank of America to Asset
Backed Funding Corporation, and Asset Backed Funding Corporation to ABFC 2005-0PTI
Trust (with Wells Fargo as trustee) - without any of this appearing on the public record. The
Larace note to Option One, Option One's endorsement of the note in blank, Larace's mortgage
to Option One, and Option One's blank mortgage assignment were all placed into a "collateral
file" and, presumably, were passed from hand to hand along the chain of entities just listed,
ending with the Custodian. The note (endorsed in blank and thus "bearer pap.er») was negotiable
by whichever entity possessed it. Since the blank mortgage assignment was ineffective, the
mortgage remained with Option One (as Originator).
As noted above, the plaintiffs sold certificates in offerings to investors and, in that
connection, issued offering documents. These included the Ibanez Private Placement
Memorand
UITl
and the Larace Prospectus Supplement. Both contained detailed descriptions of
the characteristics of the subprime residential loans that the plaintiffs were acquiring, the "risk
33 I assume iliat this is the saine entity as the plaintiff in Larace and iliat ilie plaintiff, ilierefore, was
misnamed in that complaint.
15
with those loans, documentation that the would-
and secure their 1'Ij-",,.,,,,<:<I',,
loans and lessen those
34
documentation are
they stated
The "exception" (not applicable
the name of an agent [e.g.,
related mortgage note."
recorded in the name of the
One's own name and not as an
fOJ' the Trost
Dot
,"',117..,(7' docwnents are
usr:IJaU,ln on behalf of the
received
J./ .....vvJ..LlU'\.-L 1, 2006]
will be
rpr;'''Jl'pn to be
mortgage note en(lOr:sea
mortgage with evidence of ... p.r'f",..,c11n
mortgage has not yet
a true and complete copy
of the mortgage to the
U."",""UIJvU- below),34 (4) the
(5) the originals
the Seller [Lehman
Corporation]
Mortgage Loan
the Trust
IvLLvVLVU- as such
the mortgage was
to Option One (in Option
One was acting as an agent
a.""''-5llUL'''JJ.L One named
sep,aracteness of the trust and the
"""f-""'-UL-'-'iF; "information
MemoraDldmD, it was "the agreement as
.!.A'll,Lll"-"LBrothers Holdings, [Slructmed Asset Securities
lace:melCl.r Memor?Ildum at 193. r>,.'-",VLUCLlll'. to the Private Placement IVle
c
mOranU!lIJU,
from the Transferors (including in a series of separate,
16
,...
Ibanez Private Placement Memorandum at 119 (emphasis added). Moreover, the
further states that each Transferor of a mortgage loan (here, Option One) represented and
warranted to Lehman "as direct purchaser or assignee" that "the assignment of mortgage [to
Lehman] [was] in recordable form and acceptable for recording under the laws of the relevant
applicable jurisdiction." !d. at 120-121. Assignments in recordable form to each successive
entity were thus required at every step in the securitization chain.
In Larace they stated the following:
On or about October 31,2005 ... the Depositor [Asset Backed Funding Corporation]
will transfer to the Trust Fund all of its right, title and interest in and to each Mortgage
Loan) the related mortgage notes, mortgages and other related documents (collectively,
the "Related Documents"), including all scheduled payments with respect to each such
Mortgage Loan due after the Cut-Off Date ....
The Pooling and Servicing Agreement will require that, within the time period specified
therein, the Seller [Bank of America] will deliver or cause to be delivered to the Tmstee
on behalf of the Certificateholders (or a custodian, as the Trustee's agent for such
purpose) the mortgage notes endorsed in blank and the Related Documents. In lieu of
' . delivery of original mortgages or mortgage notes, if such original is not available or lost,
the Seller may deliver or cause to be delivered true and correct copies thereof, or, with
respect to a lost mortgage note, a lost note affidavit executed by the Seiler OJ;" the
originator of such Mortgage LOah.
Unless othenvise required by Fitch or S&P, assignments of the Mortgage Loans to the
Trustee (or its nominee) will not be recorded in any jurisdiction, but will be delivered to
the Trustee in recordable form, so that they can be recorded in the event recordation is
necessary in connection with the servicing of a Mortgage Loan.
36
Larace Supplemental Prospectus at S-54 (emphasis added).37
Sale Agreements. Id. at 193, 199.
35 The SupplemeIital Prospectus makes only one exception to this requirement, not applicable here. This
exception forrriortgage loans recorded in the name of Mortgage Electronic Registration Systems, Inc. ("MERS")
or its designee, in which case all that was required was "all actions as are necessary to cause the Trust to be shown
as the oWJier of the related Mortgage Loan on the recorill; ofMERS for purposes of the system of recording transfers
of beneficial ownership of mortgages maintained by Jv1ERS." Larace Supplemental Prospectus at
37 . The Pooling and Setvicillg Agreement required the Depositor (Asset Backed Furiding Corporation), at the
time of the execution and delivery of that agreement, to provide the Trustee (Wells Fargo) "the original Mortgage
with evidence of recording thereon," "ail original of Mortgage (which may be in blank), in /onn and
substance acceptable for recording," and an original copy of any intervening assignment of mortgage showing a
17
............
Despite the requirement in both Ibanez and Larace for an assignment of the mortgage to
the trusts in recordable form at the time the loans were_ transferred to the trusts, no such
assignments were made .. As the collateral files for both loans reveal, the only mortgage
assignments executed prior to the foreclosure sales were the one from Rose Mortgage to Option
One (in Ibanez) and the ineffective blank mortgage assignments by Option One (in both Ibanez
and Lamce). Thus, at the time the foreclosure sales were noticed and conducted, the notes
{endorsed in blank without recourse and thus ''bearer paper") were held by the plaintiffs:. but the
mortgages securing those notes were both still held by Option One (as Originator).
At some point (the record does not indicate when) both the Ibanez and Lamce loans
became delinquent and a new entity (Fidelity National Foreclosure and Bankruptcy Solutions)
became involved. On April 10, 2007, purporting to act on behalf of Option One in
Option One's capacity as the of the 10an,38 Fidelity sent an email with an attached pdf
referral package
39
to the plaintiffs' counsel (the Ablitt law fum) with instructions to bring a
complete chain of assignments" for each and every loan. Larace, Pooling and Servicing Agreement at Art. II, § Z.ot
{u), (iii) & (iv) (Oct. 1, 2005) (emphasis added). The same provisions appear in the Mortgage Loan Purchase
Agreement in identical language. Mortgage Loan Purchase Agreement at Art. II, § 2.02 (li), (iii) & (iv) (Oct 1,
2005). As noted above, a blank mortgage assignment is neither recordable nor effective in Massachusetts. Thus, th .
assignment required by these agreements was one from the holder Of the mortgage directly and explicitly to the trus ,
with. trust's name, business address, and mailing address or post office address either contained or endorsed on I
the asslgnment G.L. c. 183, § 6C. . .
38 I say this based on the affidavits of Walter Porr,ir. in which he claimed that the foreclosure referrals in
both Ibanez and Larace came "from Option One Mortgage Corporation" even t40ugh the documents he attached
and/or referenced in support of that statement came from Fidelity. Ibanez, Aff. of Walter Porr, Jr. (Jan 30, 2009);
Larace, A:f£ of Walter Porr, Jr. (Feb. 2, 2009). That the foreclosure instructions in both Ibanez and Larace were
given on behalf of Option One in its capacity as the Servicer of those loans and not for Option One as the "holder 0
the mortgage" (Originator) is clear from both the referral documents themselves and the affidavits filed at the
Hampden County Registry of Deeds in connection with the subsequent foreclosure sales. See Ibanez, Aff. ofCindi
Ellis (May 7, 2008) (submitted to the Registry for Option One "as attorney in fact for U.S. Bank National.
Association, as Trustee for the Structured Asset Securities Corporation Mortgage Pass-Through Certificates, Series
2006"); Ibanez, Massachusetts Foreclosure Deed By Corporation (May 7,2008) (signed.by Ms. Ellis for Optio
ll
One as "attorriey in facf' for U.S. Bank"); Larace, Power of Attorney (May 7,2008) (signed by Ms. Ellis and
referring to Option One as "attorney in fact for Wells Fargo"). Indeed, at oral argument, the plaintiffs' attorney
stated that the foreclosure referrals came from "the loan servicers." Statement of Walter Porr, Jr. at oral argument
(Apr. 17, 2009).
39 The record does not include a copy of the referral pacldtge, so its contents (most of which are cryptically
descnbed as "screen prints") are unknown. Ibanez, Aff. of Walter Porr, Jr. at A (Jan. 30, 2009).
18
action against Mr. Ibanez and his property "in. the name of U.S. Bank National ..
Association, as Corporation Mortgage Pass-Through
Certificates, Series 2006-Z." Ibanez, Aff. of Walter Porr; Jr. at Exs. A-C (Jan. 30,2009). On
April 18, 2007, again purportedly on behalf of Option One in Option One's capacity as the
Servicer of the loan,40 Fidelity sent a similar email and pdf referral package to Ablitt with
instructions to commence a foreclosure action against the Laraces and their property "in the
name of the investor below: Wells Fargo Bank, N.A., as Trustee for ABFC 2005-0PT! Trust,
ABFC Asset-Backed Certificates, Series 2005-0PT1," with the representation that the Larace
mortgage was "currently held" by Wells Fargo.
41
Larace, Aff. of Walter Porr, Jr. at Ex. A (Feb.
2,2009).
The Ablitt firm then filed a Servicemembers' Complaint against Mr. Ibanez, naming U.S.
Bank as the plaintiff under the representation that U.S. Bank was "the owner (or assignee) and
holder of a mortgage with a statutory power of sale given by Antonio Ibanez to Rose Mortgage,
Inc.'; Corrip1aint to Foreclose Mortgage, Land Court 07 Misc. 345456 (Apr. 17,2007). As noted
above, this was incorrect. Option One was that holder. The Notice of Mortgagee's Sale of Real
Estate, published on June 14, 21, and 28,2007 for a foreclosure sale on July 5,2007, stated that
U.S. Bank was the "present holder" of the Ibanez mortgage. As noted above, this was incorrect.
Option One was that holder. The Ibanez sale was conducted in the name of US. Bank, U.S.
Bank was the only bidder, and the "foreclosure deed" executed ten months later named u.s.
Bank as the grantor pursuant to that sale.
42
Massachusetts Foreclosure Deed By Corporation
40
See D.. 38, supra.
41 Again, the record does not include a copy of the referral package, so its contents (most of which, again, are
described as "screen prints) are unknown. Larace, Aff of Walter Porr, Jr. at Ex. A (Feb. 2, 2009).
42 U.S. Bank bought the property for $94,350, which was $16,437.27 less than the purported amount of the
outstanding loan ($110,787.27) (leaving Mr. Ibanez liable for that deficiency) and $16,650 (15%) less than the
bank's calculation of the property's actual market value ($111,000). Ibanez, Complaint at 3, 8; Aff. of Walter
Porr, Ir. at Ex. G (Jan. 30, 2009).
19
(l'.1ay 7,2008). There was no mention or suggestion in any of these documents that U.S. Bank
was proceeding to foreclose the mortgage on behalf of anyone other than itself. An assignment
of the Ibanez rriortgage to U.S. Bank from American Home Mortgage Servicmg, Inc. as the
purported "successor in interest to Option One Mortgage Corporation" was not executed until
S eptemher 2, 2008, · fourteen months after the foreclosure sale and over three months after the··
recordiiig·ofthe foreClosure deed.
43
_ ..•
The Ablitt firm brought a Servicemembers' Complaint against the Laraces, naming Wells
Fargo as the plaintiff under the representation that Wells Fargo was "the owner (or assignee) I
holder of a mortgage with a statutory power of sale given by Mark A. Urrace and Tammy L. ,
Larace to Option One Mortgage Corporation." Complaint to Foreclose Mortgage, Land Court 07
Misc. 346369 (Apr. 27,2007). As noted above, this was incorrect. Option One the hoider.
The Notice of Mortgagee's Sale of Real Estate, published on June 14,21, and 28, 2007 for a
foreclosure sale on July 5,2007, stated that Wells Fargo was the "present holder" of the Larace
rnortgage. As noted above, this was incorrect. Option One was the holder. The Larace sale was
conducted in Wells Fargo"s name, Wells Fargo was the only bidder, and the "foreclosure deed"
executed ten months later named U.S. Bank as the grantor pursuant to that Massachusetts
43 It is not clear from the record if American Home Mortgage Servicing, Inc. was, in fact, the "successor in
interest" to Option One's interest in the mortgage (as Originator) and thus able to make a valid assignment of that
interest. It may have been Option One's successor as the Servicer of the loan for U.S. Bank, but the two are not the
same. So far as can be discerned from the record and a review of corporate filings at the Massachusetts Secretary of
State's office, Option One ceased active operations in early 2008 (it withdrew its corporate registration in
Massachusetts in July of that year) and American Home Mortgage Servicing (a newly-formed corporation,
previously named AH Mortgage Acquisition Co., Inc.) purchased some of Option One's assets, but apparently not
all and (so far as thf< record shows) only Option One's Servicirig contracts. See Larace, Aff. of Michelle Halyard
(Jun. 4; 2009) (descnbiug American Home as "a [not the] successor in interest to Option One Mortgage
Corporation's Loan Servicing operations" (emphasis added)). The asset purchase agreement has not been produced,
so it is impossible to determine if Option One's interest ill the Ibanez mortgage was among the assets purchased by
American Home.
44 Wells Fargo bought the property for $120,397.03, which was purportedly the amount of the outstanding
loan, "plus aU outstanding fees and costs" (i.e" leaving no deficiency owed), but $24,602.97 (17%) less than the
bank's calCulation of the property's actual marketvahie ($145,000). Larace Complaint at 3, 8; Aff. of Walter
Porr, Jf. at Ex:. E (Feb. 2, 2009).
20
Foreclosure Deed By Corporation (May 7, 2008), As in Ibanez, there was no mentionoL .. .
suggestion in any of these documents fargo was pr9qeeding to foreclose the mortgage
on behalf of anyone other than itself An assignment of the Lm-ace mortgage to Wells Fargo
from American Home Mortgage Servicing, Inc. as the purported "successor in interest to Option
One Mortgage Corporation" was not executed until September 2, 2008; fourteen months after the
foreclosure sale and over three months after the recording ofllie foreclosure deed.
45
Analysis afthe Newly Supplemented Facts
The Plaintiffs Were Not the Present Holders of the Mortgage at the Time of the Notice and Sale
To the extent the plaintiffs and their supporting aniici request that I reconsider and
reverse my previous ruling that the foreclosing party is statutorily required to be the "present
bolder of the mortgage" at the time ofthe notice and sale (i.e., that post-sale mortgage
assignments to the successful bidder, even if backdated, do not suffice), I decline. My reasons
are explained in my previous Memorandum and I reaffirm them again. The statute's commands
are clear, the plaintiffs' own securitization documents show that they knew of those
requirements, and if they failed to follow them; the responsibility for the consequences is theirs.
Martha's Vineyard Land Bank Comm 'n "Y. Bd. of Assessors of West Tisbury, 62 Mass. App. ct.
25,27-28 (2004) ("Where the language of a statute is clear and unambiguous, it is conclusive as
'"'
to legislative intent and the courts enforce the statute according to its plain wording, which we
are constrained to follow so long as its application would not lead to an absurd result When a
statute speaks with clarity to an issue, judicial inquiry into the statute's meaning, in all by the
most extraordinary circumstance, is finished." (internal citations and quotations omitted».
If they believe a change is warranted to reflect "industry standards and practice," they
45 Again, it is not clear from the record if American Home Mortgage Servicing, Inc. was in fact the "successor
in interest" to Option Ope's interest in the mortgage (as Originator) and thus able to make a valid assigrnnent of that
interest. See n. 43, supra.
21
,-.
must seek that change from the legislature. I note, however, that if those "standards and ..
practice" have brought us to the present situation (see, e.g., Chairman Ben Bernanke, Financial
Innovation and Consumer Frot(xtion, speech- at the Federal Reserve Sysfem's Sixth Biennial
Community Affairs Research Conference (Apr. 17,2009); R. Posner, A Failure of Capitalism:
The Crisis oj-'08 and the Descent Into DepreSSion (Harvard University Press 2009)), "we should
learn something from-'that experience." Korematsu V ~ · United States,' 323 U.S. 2 1 4 ~ - 2 4 2 (1944)
(Jackson, J., dissenting).
Perhaps in recognition of this, the plaintiffs argue that they were the "present holder of
the mortgage" qr, for statutory purposes, should be deemed to be because they possessed the
note, a blank mortgage assignment, and a series of off-record agreements by which they were
entitled to (and should have received) a mortgage assignment in recordable form. That argument
fails as well, for two reasons.
First, if, as here, the power being exercised is contract based, the party seeking to
exercise it must be authorized by that contract. See Roche v. Farnsworth, 106 Mass. 509,513
(1871) ("power must be executed in strict compliance with its terms"). Here, the only entities
authorized by the mortgages to exercise the power of sale contained therein are the original
mortgagees and the valid assignees of those mortgagees.
46
The plaintiffs Were neither at the time
46
The only person authorized by the Ibanez mortgage to invoke the power of sale is the "Lender," defined in
the mortgage as Rose Mortgage, Inc. in its capacity as mortgagee. Ibanez Mortgage at 11, ~ 22; 1, Definition (C).
TILUS, in fGil accordance with MassachuseW;law (see Ibanez Mortgage at 9, ~ 16, governing law is "federal law and
the law of the jurisdiction in which the Property is located"), the mortgage authorizes only the mortgagee or a valid
assignee of the mortgagee to invoke the statutory power of sale. See Lamson & Co. v. Abrams, 305 Mass. 238, 242
(1941) (assignee of properly-assigned mortgage succeeds to all of the mortgagee's rights in the property, leaving the
assignor with none). This does not include a person or entity which only holds the note. See Ibanez Mortgage at 7,
third full paragraph (distinguishing between "Lender" and "any purchaser of the Note"). Making this even more
crystal clear is the mortgage's reference to the power of sale as the statutory power of sale (Ibanez Mortgage at II,
22), which can be invoked only by "the mortgagee or his executors, administrators, successors or assigns." G.L. c.
183, § 21.
The same is true of the Larace mortgage. Only the original mortgagee or the valid assignee of the
mortgagee can act under the power of sale. "Lender" is defined as Option One Mortgage Corporation. Larace
Mortgage at 1. The law that governs the interpretation of the mortgage is "federal law and the law of the jurisdiction
22
of notice and sale because, as discussed above? .ther:e had never been 9:Q of
mortgage to them. The blank mortgage assignments they possessed transferred nothing.
Second, in Massachusetts, a mortgage is a conveyance ofland. · Nothing is conveyed
unless and until it is validly conveyed. The various agreements between the securitization
entities stating that each had a right to an assignment of the mortgage are not themselves an
assignment and they are certainly not in recordable fonn.
47
At best, the agreements gave those
entities a right to bring an action to get an assignment. But actually holding something and
having only the right to be its holder are two very different things. To obtain a mortgage
assignment you do not actually possess presumes, at the least, that you have a demonstrable right
to get it, that you will be able to determine the entity that validly holds the :r;nortgage you need
assigned (not always easy when all previous assignments have not been recorded at the
Registry),48 that that entity will still be operational,49 that it will be able to find the relevant
.paperwork, that it will have someone with authority to execute the relevant paperwork, and that it [
will be able to do so in a timely fashion. These presumptions are not always accurate. See n. 21,
supra. As noted above, even the plaintiffs, armed with all their contractual rights, knowledge,
and (presumably) access to the relevant files and authorized persons, took ten months in Ibanez,
and fourteen months in Larace, to get acmal mortgage assignments in recordable form. And
in which the Property is located," i.e., Massachusetts. Larace Mortgage at 4, '\115. The assigns that are benefited by
the covenants and agreements in the mortgage (Larace Mortgage at 4, '\112) are thus limited to the assigns
recognized by Massachusetts law (i. e., valid assignees of the mortgage). And the power of sale in the mortgage is
identified as the statutory power of sale (La race Mortgage at 5, 21), which, as noted above, can only be invoked
by "the mortgagee or his executors, administrators, successors or assigns." G.1. c. 183, § 21.
47 It is also important to note that, at every step in the securitization process, the contractual right to
immediate transfer of a mortgage assignment in recordable form was breached. See discussion at 12-18, supra.
43 An assignment simply from the last. assignee of record may not be sufficient That assignee may have
previously assigned the in an off-record transaction and that. off-record assignt'\lent may be recorded
if erroneously) while you are waiting for yours to' be processed - a process that the plaintiffs' COunsel conceded
currently takes anywhere from "two to three months" to "as long as ten to twelve as is observed in some of these
cases. And quite frankly, who knows why." Statement of Walter Porr, Ir. at oral. argument (Apr. 17,2009). If so,
you would need to pursue an assignment from that entity, with associated additional potential problems and delay.
49 As noted above, Lehman J?rothers and its subsidiaries are currently in ba,nk:ruptcy and Option Qn,e has
ceased operations. .
23
even those assignments may be problematic.
5o
The plaintiffs make much of the fact that they were the holders of the note at the time· the
foreclosure 'sale noticed and conducted. But even a valid transfer of the note does not
automatically mortgage. "[T]he holder of the mortgage and the holder of the note
may be different persons." Lamson, 305 Mass. at 245. holder of the note may have an
equitable right to obtain an assignment of the mortgage by filing an action in equity, but that is
8.11 it has. Barnes Y. Boardman, 149 Mass. 106, 114 (1889). The mortgage itself remains with
tb.e mortgagee (or, if properly assigned) its assignee) who is deemed to hold "the legal title in
trust for the purchaser of the debt" illltil the formal assignment of the mortgage to the note holder
or, absent such assignment, by order of the court:in an action for conveyance of the mortgage.
fd.; see also Eno & Hovey, § at 299 and cases cited there:in. But, as noted above, the right
to get something and actually having it are two different things. When a bidder goes to a
foreclosure sale, he or she is 'promised and expects to get a conveyance of the property. A bidder I
does not expect to purchase the right to a potential lawsuit, which will only entitle b..iIn" or her to
actually obtain the property if such lawsuit is sUccessful.
51
G.L. c. 244, § 14 recognizes this, and
limits the right of foreclosure by sale to "the mortgagee or person havmg his [the mortgagee's]
estate in the land mortgaged,,,52 "a person authorized by the power of sale,,,53 and the du1y
50 See Il. 43 & 45, supra.
51 This is why G.L. c. 244, § 14 requires the foreclosing party to be in possession of a valid assignment of the
mortgage in recordable form at the time of Ilotice md sale. Without the ability to "go to record" immediately, the
title is in doubt and potelltial bidders cannot help but be chilled.. Tb say that bidders are absolutely confident that the
foreclosing party will be able to produce the requisite assignment at some pomt md they are not deterred in the
slightest by the prospect of delays of up to fourteen mOllths to do so, is to ign.ore reality. G.L. c. 244, § 14, with its
for clarity, permits IlO such assumptions. Bottomly, 13 Mass. App: Ct at 483-84 (statute requires strict
compliance). The legislature has not forgotten that a person:s home, his or her equity in that home, md the potential
of thousands of dollars in avoidable defiCiency debt are at stake.
52 The original statutory language, inaking absolutely clear that the phrase "or person having his estate in the
land mortgaged" refers to the mortgagee's estate in the lmd, was the following:
In all cases, in which a power of sale is contained in a mortgage deed of real property, the mortgagee, or
any person having his estate therein, or in or by such power authoriZed to act in the premises, may, upon a
breach of the conditioll thereof, give such notices and do all such acts as are authorized or required by such
24
authorizedattomey, legal guardian, or of such mortgagee or person "acting in the
name of such mortgagee or person." G.L. c. 244, § 14. The words "having his estate in the land
mortgaged" make clear that the assignment required (exactly as required by "title theory" case
law) is a valid conveyance of the mortgagee's interest in the land with all the "deed"
requirements that that err-tails.
The Plaintiffs' Foreclosures Did Not Become Valid Because They Pwportedly Were
"Authorized" By the Actual Mortgage Holders
The plaintiffs' fallback argument - that their foreclosures were valid because they were
done at the direction of the actual mortgage holder (Option One) - also fails, for two reasons.
First, the direction did not come from Option One, but rather from another entity
(Fidelity) acting for Option One in its capacity as Loan Servicer. There is nothing in the record
that shows Fidelity's capacity to act for Option One generally (and, more specifically, as,
Originator and holder of the mortgage) and certainly nothing that shows it had any authority to
order the disposition of Option One's assets. Tills is no mere technicality. It should never be
forgotten that the subjects of these purported directions were interests in land, with all the proofs
and safeguards that that necessarily entails. See, e.g., G.L. c. 259, § 1 (statute of frauds).
Second, and most importantly, G.L. c. 244, § 14 requires complete transparency. See,
e.g., Roche, 106 Mass. at 513 ("These are obscurities that are inconsistent with the degree of
clearness that out to exist in such an advertisement."). What is at stake is of utmost importance
and finality - the extinguishment of a person's rights in his or her property (often the
power ....
St 1857, c. 229,
53 AB previously noted, the only person authorized by the Ibanez mortgage to invoke the power of sale is the
"Lender" (Mortgage at 11, 22), defined in the mortgage as Rose Mortgage, Inc. in its capacity as mortgagee
(Mortgage at 1, Definition (C)). Thus, in full accordance with Massachusetts law (see Mortgage at 9, 16,
governing law is "federal law and the law ofthejurisdictibn in which the Property is located"), the mortgage
authorizes only the mortgagee or a valid assignee of the mortgagee to invoke the statutory power of sale. This does
not include a person or entity which onlY holds the note. See Mortgage at 7, third full paragraph (distinguishing
. between "Lender>' and "any purchaser of the Note").
25
home where that person and his or her family live) and the transfer of those rights to someone
who wants (and is entitled) to complete assurance of good title to that property so that he or she
can live there without concern. Thus, when a foreclosure is noticed and conducted for one party
by another, the name ofthe principal must be disclosed in the notice. G,L. c. 2.44, § 14. Here,
the plaintiffs were explicitly represented to be the "present holders of the mortgage" and the sale
was conducted in reliance on that.representation. They cannot now l ~ ~ to have been
something else. As Bottomly v. Kabachnick, 13 Mass. App. Ct. 480, 483-484 (1982) and
kIcGreevey v. Charlestown Five Cents Savings Bank, 294 Mass. 480,484 (1936) make clear,
G.L. c. 244, § 14 requires strict compliance and a failure to do so means that the foreclosure is
invalid.
Conclusion
~
The issues in this case are not merely problems with paperwork or a matter of dotting i's
and crossing t's. Instead, they lie at the heart of the protections given to homeowners and
borrowers by the Massachusetts legislature. To accept the plaintiffs' arguments is to allow them
to take someone's home without any demonstrable right to do so, based upon the assumption that
they ultimately will be able to show that they have that right and the further assumption that
potential bidders will be undeterred by the lack of a demonstrable legal foundation for the sale
arld will nonetheless bid full value in the expectation that that fOUlidation will ultimately be
produced, even if it takes a year or more. The law recognizes the troubling nature of these
assumptions, the harm caused if those assutnptions prove erroneous, and commands otherwise.
26
For the foregqing reasqns, the plaii'ltiffs' motions to vacate the Judgment in these cases
are DENIED.
Deborah J. Patterson, Recorder
Dated: 14 October 2009
27
..
HAMPDEN, ss.
COMMONWEALTH OF MASSACHUSETTS
THE TRIAL COURT
LAND COURT DEPARTMENT
CASE NO. 08 MISC 384283 KCL
u.S. BANK NATIONAL ASSOCIATION,)
as TRUSTEE FOR THE STRUCTURED)
ASSET SECURITIES CORPORATION )
MORTGAGE PASS-THROUGH )
CERTIFICATES, SERIES 2006-Z, )
)
Plaintiff, )
)
vs. )
)
ANTONIO IBANEZ, )
)
Defendant, )
)
PLAINTIFF, U.S. BANK NATIONAL ASSOCIATION,
AS TTRUSTEE'S, NOTICE OF APPEAL
NOTICE IS HEREBY GIVEN THAT Plaintiff, U.S. Bank National Association, as Trustee,
hereby appeals to the Appeals Court from the judgment of the Court entered on March 26, 2009, and
from the Court's denial of Plaintiff s Motion to Vacate said judgment entered on October 14,2009.
Dated: October 30,2009. u.S. BANK NATIONAL ASSOCIATION, as
TRUSTEE FOR THE STRUCTURED ASSET
SECURITIES CORPORATION PASS-THROUGH
CERTIFICATES, SERIES 2006-Z,
Plaintiff,
By Its attorneys,
Walter H. Porr, Jr., E q.
BBO# 659462
Ablitt Law Offices,P.C.
304 Cambridge Road
Woburn, MA 01801
781-246-8995
Certificate of Service " ")
. . ",....... ", t " "-
I hereby certify "that I have this date served a copy of the foregoing 8: S 5
"same by fIrst class mail, postage prepaid, on the parties to this action as follows:
Paul R. Collier, Ill, Esq.
Attorney at Law
675 Massachusetts Ave, 12th Floor
Cambridge, MA 02139
Dated: October 30, 2009
Walter H. Porr, Jr.
2
COMMONWEALTH OF MASSACHUSETTS
THE TRIAL COURT
LAND COURT DEPARTMENT
c () f?(
~ . . i ': . ",',
HAMPDEN, ss. CASE NO. 08 MISC 386755 (KCL)
WELLS FARGO B A N K ~ N.A., as ) .
TRUSTEE FOR ABFC 200S-0PTI )
TRUST, ABFC ASSET-BACKED )
CERTIFICATES, SERIES 200S-0PTl, )
Plaintiff,
vs.
MARK A. LARACE AND TAMMY L.
LARACE,
Defendants.
)
)
)
)
)
)
)
)
)
)
PLAINTIFF, WELLS FARGO BANK, N.A.,
AS TRUSTEE'S, NOTICE OF APPEAL
NOTICE IS HEREBY GIVEN THAT Plaintiff, Wells Fargo Bank, N.A., as Trustee for
ABFC 2005-0PT1 Trust, ABFC Asset-Backed Certificate, Series 2005-0PT1, hereby appeals to the
Appeals Court from the judgment of the Court entered onMarch 26, 2009, and from the Court's
denial of Plaintiffs Motion to Vacate said judgment entered on October 14,2009.
Dated: October 30, 2009. WELLS FARGO BANK, N.A., AS TRUSTEE FOR
ABFC 2005-0PTl TRUST, ABFC ASSET-BACKED
CERTIFICATES, SERIES 2005-0PT1,
Plaintiff,
U ~
Walter H. Porr, Jr., Esq.
BBO# 659462
Ablitt Law Offices, P .C.
304 Cambridge Road
Woburn, MA 01801 .
781-246-8995
.......
Certificate of Service
I hereby certify that a true and accurate copy of the above was served on all parties herein as
set forth below by· first class mail, postage prepaid, on October ':? 2009.
Glen F. Russell, Jr., Esq.
Attorney at Law
38 Rock Street, Suite #12
Fall River, MA 02720
2
V'Jestlaw.
M.G.L.A. 244 § 14
c
Effective:[See Text Amendments]
Massachusetts General Laws Annotated Currentness
Part III. Courts, Judicial Officers and Proceedings in Civil Cases (Ch. 211-262)
"§i Title III. Remedies Relating to Real Property (Ch. 237-245)
"[iii Chapter 244. Foreclosure and Redemption of Mortgages (Refs & Annos)
... § 14. Foreclosure under power of sale; procedure; notice; form
Page
The mortgagee or person having his estate in the land mortgaged, or a person authorized by the power of sale, or th
attorney duly authorized by a writing under seal, or the legal guardian or conservator of such mortgagee or person
acting in the name of such mortgagee or person, may, upon breach of condition and without action, do all the
authorized or required by the power; but no sale under such power shall be effectual to foreclose a mortgage,
previous to such sale, notice thereof has been published once in each of three successive weeks, the ftrst publicatior
to be not less than twenty-one days before the day of sale, in a newspaper, if any, published in the town where
land lies or in a newspaper with general circulation in the town where the land lies and notice thereof has been
by registered mail to the owner or owners of record of the equity of redemption as of thirty days prior to the date 9f
sale, said notice to be mailed at least fourteen days prior to the date of sale to said owner or owners to the address Strt
forth in section sixty-one of chapter one hundred and eighty-ftve, if the land is then registered or, in the case of url-
registered land, to the last address of the owner or owners of the equity of redemption appearing on the records df
the holder of the mortgage, if any, or if none, ·to the address of the owner or owners as given on his deed or on
petition for probate by which he acquired title, if any, or if in either case no address appears, then to the address
which the tax collector last sent the tax bill for the mortgaged premises to be sold, or if no tax bill has been sent for
the last preceding three years, then to the address of any of the parcels of property in the name of said owner of
cord which are to be sold under the power of sale and unless a copy of said notice of sale has been sent by registerdct
mail to all persons of record as of thirty days prior to the date of sale holding an interest in the property junior to
mortgage being foreclosed, said notice to be mailed at least fourteen days prior to the date of sale to each such pe -
son at the address of such person set forth in any document evidencing the interest or to the last address of such pe -
son known to the mortgagee. Any person of record as of thirty days prior to the date of sale holding an interest in t e
property junior to the mortgage being foreclosed may waive at any time, whether prior or subsequent to the date If
sale, the right to receive notice by mail to such person under this section and such waiver shall be deemed to
tute compliance with such notice requirement for all purposes. If no newspaper is published in such town, or if
is no newspaper with general circulation in the town where the land lies, notice may be published in a newspapyr
published in the county where the land lies, and this provision shall be implied in every power of sale mortgage In
which it is not expressly set forth. A newspaper which by its title page purports to be printed or published in su h
town, city or county, and having a circulation therein, shall be sufftcient for the purpose.
The following form of foreclosure notice may be used and may be altered as circumstances require; but nothing
herein shall be construed to prevent the use of other forms.
(Form.)
MORTGAGEE'S SALE OF REAL ESTATE.
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
I
M.G.L.A. 244 § 14 Page 2
page .......... , of which mortgage the undersigned is the present holder, .......... .
(If by assignment, or in any fiduciary capacity, give reference.)
for breach of the conditions of said mortgage and for the purpose of foreclosing the same will be sold at Public Aucfl
tion at .......... o'clock, .... M. on the .......... day of .......... A.D. (insert year), .......... (place) ...... .... all and singular th
premises described in said mortgage, .
(In case of partial releases, state exceptions.)
To wit: "(Description as in the mortgage, including all references to title, restrictions, encumbrances, etc., as made i
the mortgage.)"
Terms of sale: (State here the amount, if any, to be paid in cash by the purchaser at the time and place of the sal,
and the time or times for payment of the balance or the whole as the case may be.)
Other terms to be announced at the sale.
(Signed) ................................... Present holder of said mortgage.
A notice of sale in the above form, published in accordance with the power in the mortgage and with this chapte ,
together with such other or further notice, if any, as is required by the mortgage, shall be a sufficient notice of
sale; and the premises shall be deemed to have been sold, and the deed thereunder shall convey the premises,
to and with the benefit of all restrictions, easements, improvements, outstanding tax titles, municipal or other
taxes, assessments, liens or claims in the nature of liens, and existing encumbrances of record created prior to
mortgage, whether or not reference to such restrictions, easements, improvements, liens or encumbrances is made!e
the deed; but no purchaser at the sale shall be bound to complete the purchase if there are encumbrances, other than
those named in the mortgage and included in the notice of sale, which are not stated at the sale and included in tHe
auctioneer's contract with the purchaser.
CREDIT(S)
Amended by St.l975, c. 342; St.l977, c. 629; St.l980, c. 318, § 2; SU981, c. 242; SU981, c. 795, § II; St.l991,
157, §§ 4,5; St.1992, c. 285; St.l992, c. 287; SU998, c. 463, § 181.
Current through Chapter 19 of the 20 I 0 2nd Annual Sess.
(c) 2010 Thomson Reuters.
END OF DOCUMENT
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
ELLIOTT S. SAFFRAN
Appellant
v.
NOVASTAR MORTGAGE, INC.
Appellee
Case No. 4:07-CV-40257-PBS
ORDER RE: EMERGENCY MOTION FOR STAY PENDING APPEAL
October 18, 2007
Saris, U.S.D.J.
I. INTRODUCTION
Pro se Appellant Elliott S. Saffran, who has filed for
Bankruptcy protection under Chapter 13, seeks emergency relief to
stop a foreclosure on his home. After hearing and a review of
the submissions, I DENY the Emergency Motion for Stay Pending
Appeal.
II. BACKGROUND
The record before the Court contains evidence of the
following facts :
1. The Mortgage
Appellee, Novastar Mortgage, Inc., is the holder of a
promissory note in the original principal amount of $420,000 . 00,
dated June 27, 2006, which Mr. Saffran executed and delivered to
Novastar . To secure the Note, Mr. Saffran executed and delivered
a mortgage on his home at 26 Debbie Lane, Milford, Massachusetts
to Mortgage Electronic Registration Systems, Inc. ("MERS"), as
"nominee" for Novastar, in the amount of $420,000.00. The
mortgage was recorded in the Worcester County (South District)
Registry of Deeds in Book 39320 at Page 59. The mortgage grants
MERS, as Novastar's nominee, the power of sale, and also provides
Novastar, as the Lender, with the power to invoke the statutory
power of sale. The mortgage states: "If the default is not
cured on or before the date specified in the notice, Lender at
its option may require immediate payment in full of all sums
secured by this Security Instrument without further demand and
may invoke the STATUTORY POWER OF SALE and any other remedies
permitted by Applicable Law." The mortgage also enables
Novastar, as Lender, to "do and pay for whatever is reasonable or
appropriate to protect Lender's interest in the Property, and
rights under this Security Instrument," including appearing in
court if there is a legal proceeding that may significantly
affect Novastar's interest in the mortgaged property. Novastar
also maintains a number of other rights under the mortgagei for
example, if the mortgaged property is sold without Novastar's
prior written consent, Novastar may require immediate payment In
full of all sums secured by the mortgage.
Mr. Saffran last made payment to Novastar on September 29,
2006. The total amount of payments past due is $44,192.40 . As a
result of Mr. Saffran's failure to make payments after that date,
Novastar decided to initiate foreclosure proceedings.
2
Portions of the record regarding the foreclosure process are
unclear. As part of its routine practice in preparation for
foreclosure, Novastar requested that MERS assign the mortgage to
Novastar. Novastar asserts that the mortgage was assigned by
MERS to Novastar on February 5, 2007, but then states that an
assignment of the mortgage was intended to be executed with the
foreclosure deed, reciting the actual date of the assignment and
transfer of the mortgage. To confuse things further, the
assignment provided to the Court was dated October 8, 2007 with a
purported retroactive effective date of February 5, 2007. This
assignment and transfer has not been recorded in the Registry of
Deeds. Novastar's foreclosure counsel filed a complaint in the
Massachusetts Land Court identifying Novastar as the holder of
the mortgage on February 6, 2007. On March 12, 2007, Novastar's
foreclosure counsel scheduled a foreclosure sale for April 26,
2007 and published advertisements of the sale stating that
Novastar was the holder of the mortgage.
2. The Bankruptcy
Presumably in response to the impending foreclosure,
Appellant, Mr. Saffran, filed for protection under Chapter 13 in
the United States Bankruptcy Court for the District of
Massachusetts (Worcester) on April 23, 2007. Novastar moved for
relief from the automatic stay on June 18, 2007 and the
Bankruptcy Court entered an order allowing Novastar's motion for
3
relief from the automatic stay on July 24, 2007.
After Novastar was granted stay relief, Novastar's
foreclosure counsel rescheduled the foreclosure sale and this
time identified MERS as the holder of the mortgage in the notices
and publications published in connection with the rescheduling of
the foreclosure sale. This foreclosure sale has since been
cancelled. (Counsel now states that the foreclosure notices done
in the name of MERS, not Novastar, were in error.)
Mr. Saffran requested that the Bankruptcy Court reconsider
and reinstate the automatic stay, but the Bankruptcy Court
declined to do so, denying Mr. Saffran's motion on August 21,
2007. Mr. Saffran appealed the Bankruptcy Court's orders
granting relief from the stay and simultaneously filed an
emergency motion for stay pending appeal. On August 31, 2007,
the Bankruptcy Court denied Mr. Saffran's emergency motion. Mr.
Saffran filed his Emergency Motion for Stay Pending Appeal with
this Court on October 2, 2007.
III. DISCUSSION
1. Standard for Stay Pending Appeal
In order to succeed on a motion for stay pending appeal, the
movant must demonstrate that: (1) there is a likelihood of
success on the merits of the appeal; (2) the moving party will
suffer irreparable harm if a stay is not granted; (3) the harm to
the moving party if the stay is not granted is greater than the
4
injury to the opposing party if the stay is granted; and (4) the
public interest would not be adversely affected by the issuance
of the stay. In re Miraj and Sons, Inc., 201 B.R. 23, 26 (Bankr.
D. Mass. 1996) citing In re Froment, 171 B.R. 170, 172 (Bankr. D.
Mass. 1994). Mr. Saffran raises three arguments to demonstrate
a likelihood of success on the merits on appeal.
First, Mr. Saffran argues that Appellee, Novastar, lacks
standing to seek relief from the automatic stay because MERS, not
Novastar, is the holder of the mortgage. In re Huggins, 357 B.R.
180, 184 - 85 (Bankr. D. Mass. 2006) (holding that as nominee of
the mortgage, MERS had standing to assert the mortgage rights in
a stay relief motion). Novastar insists that it was the holder
of the mortgage when the foreclosure proceedings were initiated,
and that the most recent notice listing MERS as the holder was in
error. While the record is unclear as to when the mortgage was
assigned, this ambiguity does not help appellant, for even if
MERS were still legally the holder of the mortgage in June 2007,
Novastar had standing to seek relief from the stay. In this
case, regardless of whether Novastar technically had "ownership"
of the mortgage, Novastar retained the authority to invoke the
statutory power of sale, pursuant to Mass. Gen. Laws ch. 244, §
14, and to appear in court to protect its financial interests.
Cf. Nichols v. Cadle Co., 139 F.3d 59, 62 (1st Cir. 1998)
(involving situation where there are "splintered rights that,
taken together, comprise 'ownership' of the mortgage"). Thus,
5
regardless of whether the assignment from MERS to Novastar was in
effect in the spring of 2007, or whether the current assignment
has retroactive effect,l Novastar had sufficient financial
interest to have standing to seek relief from stay.
In any event, MERS has now assigned the mortgage to Novastar
in writing; an unrecorded assignment can confer standing to
foreclose. See, e.g., Lamson & Co. v. Abrams, 305 Mass. 238,
242, 25 N.E.2d 374, 376 (Mass. 1940) (noting that the "holder of
the unrecorded assignment was entitled to possession and to
foreclose by sale"); Provident Co-Op. Bank v. James Talcott,
Inc., 358 Mass. 180, 188, 260 N.E.2d 903, 908 (Mass. 1970).
Second, Mr. Saffran argues that the Bankruptcy Court erred
by not giving him an evidentiary hearing, particularly with
respect to whether he has made post-petition payments to
Novastar. At the Court's request, Novastar filed an affidavit
stating that the last payment made by Appellant to Appellee was
on September 29, 2006. Mr. Saffran has provided this Court with
no contradictory evidence, despite repeated opportunities to do
so.
Third, Mr. Saffran has argued that the order entered in the
1 Some courts have found attempts to make mortgage
assignments retroactively effective unsuccessful. See, e.g.,
Countrywide Home Loans, Inc. v. Taylor, No. 5013-2007, 2007 WL
2744892 (N.Y. Sup. Ct. 2007) (holding that, despite a purportedly
retroactive assignment, assignee did not have ownership interest
in mortgage at time foreclosure action was commenced, as required
to foreclose on mortgage) .
6
Bankruptcy Court granting relief from the stay identified the
relevant property as located at 23 Debbie Lane, Milford, MA,
which property, if there is a building located at that address,
is not owned by Mr. Saffran. The Court has determined that this
was a typographical error on the part of the Bankruptcy Court and
does not affect the validity of the order.
IV. ORDER
Mr. Saffran's emergency motion for stay pending appeal is
DENIED.
S/PATTI B. SARIS
united States District Judge
7
Judge upholds ruling on sales of foreclosed properties - The Boston Globe Page 1 of 2
THIS STORY HAS BEEN FORMATIED FOR EASY PRINTIN
Ruling upheld on sale of property
Ownership status of foreclosures clouded
By Jenlfer B. McKim, Globe Staff I October 15, 2009
The ownership status of hundreds, and possibly thousands, of foreclosed properties in Massachusetts
became muddier yesterday after a state Land Court judge reaffirmed his March decision that invalidated the
sales of two Springfield homes because of improper paperwork.
In a 27-page ruling, Justice Keith C. Long described a convoluted process in which mortgages for the two
homes were transferred multiple times without being properly recorded, as required by state foreclosure law.
He said any problems the banks now face to clean up title questions - which could include redoing the
foreclosures altogether· are "entirely of their own making."
"The issues in this case are not merely problems with paperwork or a matter of dotting i's and crOSSing I's,"
Long wrote. "Instead, they lie at the heart of the protections given to homeowners and borrowers by the
Massach usetts Legislature."
The ruling drew praise and criticism from attorneys, individuals, and housing advocates who had been
anxiously awaiting word from the court.
Before the March decision, many lenders believed they could complete foreclosure transactions and later file
formal proof they held the mortgages. Since then, however, some lenders have stopped selling foreclosed
properties out of fear the sales later could be voided, and many title companies have refused to insure
with ownership issues. That has affected the ability of communities and non profits to buy foreclosed homes i
some of the state's hardest hi1 areas. It has also made it more difficult for individual buyers and sellers of
foreclosed properties to close deals.
The attorneys who filed the lawsuit that prompted Long's original ruling said they are considering an appeal 0
yesterday's decision. "He has thrown the entire nature of foreclosure work and thousands of titles back up in
the air and doesn't seem to care," said Lawrence Scofield, an attomey with Ablitt Law Offices in Woburn,
which represented the lenders in three consolidated cases ruled on by Long.
The Springfield lawsuit was filed by foreclosing lenders who said they wanted to remove a "cloud" from the
titles of three properties created because of where they chose to publish foreclosure auction notices. But Lo g
focused on a secondary issue - whether the foreclosures complied with the law because they did not officially
name the mortgage holders. I
During the housing boom, millions of mortgages were bundled into bonds and sold to investors, a process that
often resulted in a twisted paper trail. Long's decision detailed how mortgages for two of the Springfield hom' s
changed hands as many as three times without any of the information appearing on the public record. The
final owners - US Bank National Association and Wells Fargo Bank - did not record that they owned the
mortgages until 14 months after the sales, he said.
Those in favor of the ruling said it will help those fighting foreclosures to find a way to remain in their homes
and permi1 some who have already moved on to regain their homes. Long's decision also bolsters a growin '
national movement among housing advocates, and some courts, to push lenders to produce accurate
documentation before completing a foreclosure.
Nadine Cohen, managing attorney in the consumer rights unit at Greater Boston Legal Services, said the
issues brought up in the case support the need for a state law to mandate that foreclosures of owner-occup·ed
homes be overseen by a judge.
hffn, IIwww.boston.com!realestate!newslarticles/2009/1 OIlS/judge o!Lsale. .. 12llf OO9
Judge upholds mling on sales of foreclosed properties - The Boston Globe Page 2 of
"Borrowers have a right to know who owns their mortgage, and they have a right to make sure that the entity
that is foreclosing has a legal right to foreclose," Cohen said. "For too long these lenders have been ignoring
the foreclosure laws."
Boston attorney Paul Collier, who represented one of the defendants in the Springfield case, Antonio Ibanez,
said his client never expected to win back the property he purchased for $115,000 and later lost to foreclosure'
j
He said Ibanez overpaid for the home, which he could not afford. He said Ibanez will likely wait until the appeal
process is completed before deciding whether to take any action.
Collier said there probably won't be a flood of former homeowners fighting to get back their properties as a
result of Long's decision, but there could be enough to create problems for new owners, lenders, title
companies, auctioneers, and others involved in the sale of foreclosed properties. "You are going to see a ton
of payouts here," he said.
Boston City Housing chief Evelyn Friedman said that although the decision protects homeowners trying to
ward off foreclosures, it also is delaying the city's efforts to clean up areas plagued by abandoned homes.
Already, the judge's March ruling stymied the city's effort to buy 20 bank-owned properties.
''The unfortunate part is that many people already have been foreclosed upon and now their properties can't
be reSOld," Friedman said. ''That holds up quite a bit of our work in revitalizing the neighborhoods that have
been most devastated."
Because of the ruling, Developer John O'Riordan said he worries he might now lose an investment property ill
Jamaica Plain he bought from a bank last year for $480,000 and renovated for $200,000. Now he can't sell the
units because of title issues and has run out of money.
''The real estate situation in Massachusetts is on its knees and this does not help the cause at all ," O'Riordan
said .•
© CQPyrtgbJ 2009 The New York Times Company
httn·lJwww _ hoston.comlrealestate/news/articlesl20091 1 12111 009

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