Last year I bought the first home I did not live in, a foreclosed townhouse in my hometown of Jackson, N.J. I hope I didn’t make a big mistake. This foreclosure mess is getting messier by the day.-Lou
Mass. Supreme Court to Consider Whether Buyers Of Out Of Faulty Foreclosures Actually Own Property
Oh boy, if you think the Massachusetts Supreme Judicial Court decision on Ibanez, which raised serious questions about the validity of transfers in mortgage securitizations, turned heads in the banking industry, you ain’t seen nothin’ yet.
The SJC is considering what has the potential to be another widely-watched case, Bevilacqua v. Rodriguez. Note this case was heard at the lower court level by the same land court judge, Keith Long, that ruled on Ibanez, and the SJC in large measure affirmed Long’s take in that case. The issue is key: whether a buyer can own a piece of real estate acquired from a party that lacked the right to foreclose upon the previous owner.
The background via Bloomberg (hat tip April Charney):
Francis J. Bevilacqua III went to Long’s court to force the original owner to say whether he had a claim on the property in Haverhill, about 36 miles (58 kilometers) north of Boston. A city assessment website lists four condominiums at the location with a total value of $600,300.
Bevilacqua asked Long whether he could try to find the original owner through newspaper notices, said his lawyer Jeffrey B. Loeb, of Rich May PC in Boston, in a phone interview.
In August, Long ruled that Bevilacqua wasn’t the property’s owner and didn’t have standing to inquire about claims. U.S. Bancorp, which sold Bevilacqua the property in 2006, conducted an invalid foreclosure because it didn’t properly own the mortgage at the time, Long said.
The mortgage transfer to U.S. Bancorp, which oversees the mortgage-backed trust containing the loan, happened after the foreclosure, Long said. All Bevilacqua had was a deed from an invalid foreclosure sale, the judge said.
“I have great sympathy for Mr. Bevilacqua’s situation — he was not the one who conducted the invalid foreclosure, and presumably purchased from the foreclosing entity in reliance on receiving good title — but if that was the case his proper grievance and proper remedy is against that wrongfully foreclosing entity on which he relied,” Long wrote.