Our Riverside foreclosure defense lawyers wrote earlier this year about an important ruling from the Massachusetts Supreme Judicial Court, that state's highest court. In that case, one of several similar cases from state high courts, the court found that a foreclosure may not continue if the lender cannot prove it owns the mortgage and note. In this case, the high court ruled on a conflict further into the process: What happens when a wrongfully foreclosed home is sold to a new owner? In Bevilacqua v. Rodriguez, the Supreme Judicial Court ruled against the purchaser, finding that he did not own the home despite having paid a bank for it. However, it found that Francis Bevilacqua, the purchaser, may have rights as a mortgagee.
Bevilacqua bought the home in a foreclosure sale from U.S. Bank, which had acquired it by foreclosing on Pablo Rodriguez. At the time of the sale, the mortgage was assigned to MERS by Rodriguez's lender. U.S. Bank sold the mortgage to itself as trustee in June of 2006; MERS assigned the mortgage to U.S. Bank a month later, and the bank granted a quitclaim deed to Bevilacqua in October. In April of 2010, Bevilacqua filed a petition in Massachusetts Land Court to compel Rodriguez to try title to the property, seeking an order that either compels Rodriguez to try the title or yield his claim to the property. Rodriguez never appeared in court or was located, but the Land Court sua sponte raised the issue of whether Bevilacqua had standing to sue, then concluded that he did not, because he holds no title to the property, and dismissed the case with prejudice. Bevilacqua appealed to the Massachusetts Supreme Judicial Court.
The high court noted that it had been more than a century since it considered a try title case, and briefly discussed the history and purpose of the law. The statute in its modern form requires claims to be based on possession of title to the land. Bevilacqua claimed he had title to the land because he had a quitclaim deed. This was not enough in itself to create title, the court said, and Bevilacqua could also not show a chain of title sufficient to support his quitclaim. Under the January case, U.S. Bank v. Ibanez, the court reiterated that Massachusetts requires sellers to have the actual authority to sell, or the sale is void. Thus, because U.S. Bank did not have the right to foreclose at the time that it did, Bevilacqua's quitclaim is invalid. Indeed, it said the very reasoning behind the try-title action invalidated it. It was intrigued by Bevilacqua's alternative theory, that he is an assignee of the mortgage, but said it still gives him no right to a try-title action. Thus, it said the lower court was correct to dismiss the case. However, it noted, it should not have dismissed the case with prejudice, since Bevilacqua may still be able to bring other cases.
As Laguna Beach foreclosure defense attorneys, we sympathize with people like Bevilacqua, who are unlikely to have checked the land records (and are unable to check MERS) for a legitimate chain of title before they purchased a foreclosed home. But in order to fairly enforce the law requiring lenders to own the property, the court must be consistent, and that means invalidated foreclosure sales that the lender was never authorized to make. The court mentioned that Bevilacqua may have rights as a mortgagee, so he may still be able to bring claims in other areas of the law, including possibly to foreclose on Rodriguez. He might also choose to sue U.S. Bank for fraud or negligence, since its sloppiness put him in this position. As Norwalk foreclosure defense lawyers, we suspect Massachusetts lenders may face litigation like this soon.
If you're facing a foreclosure that you believe you could avoid, even though your loan servicer doesn't seem interested in helping, don't hesitate to call Howard Law, P.C. For an evaluation of your case, send us a message online or call 1-800-872-5925.