The Massachusetts Foreclosure Blog presents cases summaries on major Massachusetts foreclosure law cases. This post discusses Bevilacqua v. Rodriguez, the sequel to the seminal U.S. Bank v. Ibanez decision.
Bevilacqua, in many regards, came directly as a result of U.S. Bank v. Ibanez. A little recap: in Ibanez, the Supreme Judicial Court held that a foreclosing entity must have record assignment of the mortgage prior to foreclosure. The Court’s decision had immediate ramifications for property owners in Massachusetts; many foreclosures were now void, and other than re-doing the foreclosures, there seemed to be no way of fixing these “Ibanez” defects.
Bevilacqua was an attempt by a homeowner who purchased a foreclosed property to establish good title to his home. As a result of Ibanez, this homeowner did not have good title to his home, due to the underlining foreclosure. To fix this problem, the homeowner brought a try title case against the prior, foreclosed homeowner. A try title case allows a person in possession of land, with record title, to bring a court action against a claimant with an adverse claim to the property and compel them to try their claim from the property, or forever be barred from doing so. In other words, try title requires the adverse claimant to “put up or shut up” their claim against the underlining property. In this case, the claimant was trying to compel the former homeowner to try his claim related to the void foreclosure.
The Court didn’t get into the merits of this claim because it found that the claimant lacked standing to raise this kind of action. To bring a try title action, a claimant needs to have 1) possession of the property and 2) record title. This latter requirement was fatal to the claimant’s case. The Court held that because the underlining foreclosure was void, the claimant had no title. In other words, with a defective foreclosure, it is as if the foreclosure never occurred in the first place.
So, what are the take home points from Bevilacqua?
- No easy solutions exist for defective foreclosures. It is estimated that thousands of foreclosure are invalid as a result of Ibanez and other than redoing the foreclosure, there are no quick fixes for ensuring the title of these properties.
- Bevilacqua rejects the theory of a “good-faith buyer” against a void foreclosure. In other words, a third-party buyer–who had nothing to do with the foreclosure–cannot escape the problems of defective title by merely claim to be an innocent party who purchased a home without knowing about the foreclosure. In foreclosure court cases, these third-party parties often try to make this argument and Bevilacqua seems to amply reject this claim.