1. Foreclosures & Workouts Update 2016
Katherine Prifti, Esq.
Underwriting Counsel

2. Pinti vs. Emigrant Mortgage
Notice has to “strictly comply” with Paragraph 22 of the mortgage.
The Supreme Judicial Court ruled that a lender’s defective notice of default was grounds to void a foreclosure sale.
The notice has to say that the borrower had the right to initiate court action to challenge the default or foreclosure.

3. Bank of America, NA. vs. Debora A. Casey
Supreme Judicial Court rules that the attorney 5B affidavit could correct material defects in certificate of acknowledgement.
Supreme Judicial Court also ruled that the attorney affidavit could provide constructive notice of the mortgage to a bona fide purchaser;

4. Paiva v. Bank of New York Mellon
General Law c. 244, section 15A, requires foreclosing banks to notify tax authorities within 30 days of conveying title
District Court held that failure to comply with this post foreclosure statutory provision does affect the validity of the foreclosure sale

5. Foreclosure 2015 New Legis-lation Paiva Pinti 2012 Eaton 2011
Bevil-acqua
Ibanez - SJC
2009
Ibanez
Pre-2009
The world we knew

6. Statutory Laws Non-Judicial Foreclosure
Statutory Framework
The beginning
Non-Judicial Foreclosure
Statutory Law Governing Typical Manner of Foreclosures in Massachusetts is:
MGL Chapter 244
MGL Chapter 244 Sec. 1: Foreclosure by Entry
MGL Chapter 244 Sec. 14: Foreclosure under
Power of Sale

7. Servicemembers Complaint
Complaint list the plaintiff as the original record mortgagee or holder by merger.
Complaint names correct defendant
Complaint reference correct property address
Reference original mortgagee
Date of Judgment or pro confesso pre-date the auction date.

8. Case Law U.S. Bank National Association v. Ibanez
Sale
Entry
The Beginning
Ibanez
2009
Ibanez - SJC
2011
U.S. Bank National Association v. Ibanez
Issue: Back Dated assignments
Fallout: Common practice
SJC upholds decision
Applies Retroactively …

9. Compliance with Ibanez - Requirement
Was the assignment into the foreclosing entity signed before the first publication?

10. Case Law
Sale
Entry
The Beginning
Ibanez
2009
Ibanez – SJC
Bevil-acqua
2011
Eaton
2012
Eaton v. Federal National Mortgage Association, 462 Mass. 569 (2012)
Issue: Foreclosure challenge relating to note-holder status
SJC holds: foreclosing mortgagee must “hold” the note or must be agent of note holder
Fallout: Note is off-record

11. Compliance with Eaton - Requirement
So-called “Eaton Affidavit”
Purpose: Establish that the foreclosing lender is the holder of the note at the time the foreclosure commenced or that it was the authorized agent of the note holder.
Note: Eaton applies to both Residential & Commercial foreclosures

12. Compliance with Eaton - Requirement
First publication between June 22, 2012 and October 31, 2012, Eaton Affidavit required.
Form is a proper MGL c. 183 Sec. 5B.
Subscribed and sworn to under the pains and penalties of perjury with a proper jurat.
Recite that it is based on the review of note holder’s records and the foreclosing mortgagee is the holder of the note or agent of the holder of the note.

13. New Legislation
Sale
Entry
The Beginning
Ibanez
2009
Ibanez – SJC
Bevil-acqua
2011
Eaton
Legislation
2012
The Act Preventing Unlawful and Unnecessary Foreclosures
Effective November 1, 2012
The Act Amends MGL 244 Sec. 14
Requires: All assignment be recorded prior to first publication

14. New Legislation
Sale
Entry
The Beginning
Ibanez
2009
Ibanez – SJC
Bevil-acqua
2011
Eaton
New Legislation
2012
The Act Preventing Unlawful and Unnecessary Foreclosures
Effective November 1, 2012
The Act Added Section 35B and 35C to Chapter 244 of the Massachusetts General Laws.

15. Acts The Act Preventing Unlawful and Unnecessary Foreclosures
Added Section 35B and 35C to Chapter 244 of the Massachusetts General Laws.
For this purpose, in circumstances where there is a foreclosure of a 1-4 family, owner-occupied, residential mortgage, affidavits of compliance with the new statues are required.

16. Compliance with 35B & 35C
35B affidavit indicating compliance or non-applicability – dated prior to the first publication
(applies only to “certain loans”)
Purpose: creditor has offered mortgagor means to avoid foreclosure
35C affidavit – codified Eaton for “certain loans”

17. Compliance with 35B & 35C
First publication date on or after November 1, 2012
Is it a one to four family, owner occupied, residential property. Then MGL 244 Sec 35B and 35C affidavits are required.
Affidavit has to be subscribed and sworn to under the pains and penalties of perjury with a proper jurat.
Executed prior to the first publication.
Recite that its based on the review of the creditors records and foreclosing mortgagee is the note holder.

18. Entry
Entry made by mortgagee’s representative with authority to make entry.
Does entry list correct mortgageor, mortgagee and mortgage information.
Entry states that the mortgagee made an open, peaceable and unopposed entry on the land, for the purposes of foreclosing the mortgage for breach of the conditions thereof.
Entry has to be witnessed by two disinterested witnesses
Entry has to have a jurat by a disinterested notary with a valid commission.

19. Case Law An Act Clearing Title to Foreclosed Properties
Sale
Entry
The Beginning
Ibanez
2009
Ibanez – SJC
Bevilacqua
2011
Eaton
New Legislation
2012
Pinti
Paiva
Act Clearing Title to FCL prop
2015
An Act Clearing Title to Foreclosed Properties
Effective: December 31, 2016
Response to: Ibanez … back in 2009

20. Foreclosure Deed and Affidavit
Grantor has to be the current mortgage holder on record and party who conducted foreclosure.
Foreclosing mortgagee the holder of record as of the first publication date.
Consideration on the deed match the consideration stated in the affidavit.
Grantee the highest bidder or the assignee thereof and that is stated in the affidavit.
Party executing foreclosure deed have authority to do so (MGL 183 Sec. 54B)
Document property acknowledged
Foreclosure affidavit under oath by an individual

21. Foreclosure Deed and Affidavit
Mortgagee’s sale of Real Estate notice published for three consecutive weeks, the first publication being at least 21 days before the published sale date? Do the dates in the publication match the affidavit?
Mortgagees Sale of Real Estate notice published in a newspaper having general circulation in the town of the property being foreclosed.
Property description in mortgage match that of the publication.
Affidavit has to state that it complied with MGL 244 section 14.
Sale date and time in the publication match that of the affidavit.
Affidavit has to list the name of the auctioneer and indicate that the auctioneer is duly licensed.
Affidavit mention that the property was sold to the highest bidder which has to be the grantee on the foreclosure deed.

22. In order to insure the property has to be vacant.
Off-Record Evidence
Check the Bankruptcy Records. If the borrower is in Bankruptcy is there Relief of Stay so the mortgagee can proceed with the foreclosure.
Review green cards to ensure that all junior lien holders received notice.
Make sure notice is provided to the owners at the proper address.
Is notice timely? Notice was mailed 14 days prior to the published sale date to owners of the equity of redemption and all junior lien holders appearing of record 30 days prior to the published sales date.
In order to insure the property has to be vacant.