Mortgage/Deed Reformations & Foreclosure Defense

As the foreclosure crisis continues throughout Massachusetts and the rest of the country, mortgage/deed reformations continue to be popular cases in Massachusetts Land Court and Superior Court. With the right approach, these cases can be effective tools in foreclosure defense.

Reformation cases, simply put, are attempts by banks and lenders to fix mistakes in mortgages and deeds.  When a mortgage loan is in default, the foreclosing entity often takes a close look at the title to see if the paperwork is in order.  In many cases, these foreclosing entities are finding huge mistakes in mortgages and deeds, including incorrect property descriptions and missing information (a reason why real estate law has one of the highest areas of legal malpractice).

The bank and lenders will often first try to contact the borrowers and see if they will consent to correcting the mistake.  If they won’t, the bank or lender needs to bring a court action to reform the mortgage or deed.  These cases are generally brought in either Superior Court or Land Court and ask the Court to correct the error based on principles of equity and fairness.

Following a common piece of advice given on this blog:  if you get notice of one of these lawsuits against you, don’t ignore it.  The foreclosing entity is bringing one of these lawsuits for a simple reason: unless it corrects the mistake in the land records, it can’t foreclose.  With this in mind, you may be able to use this mistake to your benefit and negotiate with your lender for a loan modification or some alternatives.

If you find yourself in one of these situations, contact me for a consultation.

How a Foreclosure Defense Attorney Can Help You Leave a Home You No Longer Wish to Keep

While foreclosure defense attorneys are generally in the business of helping people save their homes, struggling homeowners should also consider an attorney when they simply want to walk away.

For many reasons, some homeowners are ready to be done with their homes and move on.  Either they cannot afford the home even with the best loan modification or they have simply had enough and are ready for a change.  In any case, the worst thing these homeowners can do is simply pack up and move away.  Why?  Until a foreclosure happens or you convey the property, you still own the home. Therefore, you’re still liable for anything that happens at the home (and still responsible for any state/city taxes and services).  For example, if someone is hurt as a result of you not maintaining the property after you’ve walked away, you could very well be responsible for any injuries or expenses caused by your failure to maintain the premises.

Homeowners in these situations have several opportunities to gracefully leave their homes, including a short sale and deed-in-lieu of foreclosure. Not only do these options prevent any potential liability, they also avoid the stigma of having a foreclosure on one’s record.

This advice also applies to former homeowners living in foreclosed homes.  Even if you’re ready to move, it is a good idea to notify the new owner in writing and let them know you are no longer in possession of the home.  Moreover, these former homeowners can often make “cash for keys” settlements that will provide them money for relocation expenses in exchange for leaving the home.

Do any of these situations apply to you?  Contact me for a consultation.

Practice Pointers: How to Help Your Foreclosure Defense Attorney Help You

As a foreclosure defense attorney, I’m in the business of helping struggling homeowners save their homes.  Potential clients who are facing home foreclosure often ask me, “What can I do to help my case?”

The best way to help your attorney with your case is the preparation you do before you meet with an attorney.  Here are some things I find that clients can do to help me do my job better (and, save them less money in legal fees).  These tips are geared towards foreclosure defense but also apply to most other areas of law:

  • Create a Timeline:  Most foreclosure cases (and many other areas of law) are fact intensive, and its a huge help for a client to have a timeline of the case, from beginning to end.
  • Keep Copies of Everything:  Having ready access to the important papers in your case save incredible time for your attorney.  Keep copies of everything.  With that in mind . . .
  • Stay Organized:  Find a way to organize your materials. I’m a huge believer in going “paperless” by scanning all my documents and then storing them into easy-to-find folders on my computer. Services like Google Drive and Dropbox are great for this. Being able to provide your attorney with an organized file of your paperwork makes everyone’s life much easier.
  • Create a “cast of characters:  Make a list of every person who has anything to do with your case (or knows something about it).  Include as much information about each person you know. Not only will this help your lawyer better prepare your case, it helps your lawyer determine if he or she has a conflict in taking your case.

Breaking News: Supreme Judicial Court Issues Galiastro v. MERS Decision; Permits Parties on Appeal to Use “Produce the Note” Argument

The Supreme Judicial Court issued its decision in Galiastro v. MERS and allowed homeowners on appeal to use “produce the note” arguments in their foreclosure defense cases.  In Eaton v. Federal National Mortgage Association, the Court held that a foreclosing mortgagee must hold the promissory note at the time of a foreclosure sale.  This decision, however, was prospective and applied only to foreclosures whose notices of sale were issued after the date of the decision:  June 22, 2012.  In Galiastro, the Court extended the “Eaton rule” to parties who had appeals pending in the Appeals Court when the Court decided Eaton.

More on this to come, but the Court’s decision makes sense.  It would be unjust to allow Eaton to apply for that single case that made it to the Supreme Judicial Court but not for others who were similarly on appeal.

Hire a Foreclosure Defense Lawyer for a Loan Modification

loan modifications

To help homeowners avoid foreclosure, state and federal law often requires lenders and servicers to offer loan modifications to qualifying borrowers. Federal programs like the Home Affordable Modification Program (“HAMP”) are designed to get monthly mortgage payments down to an affordable amount (HAMP aims for your payment to be 31% of your income).

While the concept is simple, the process often is not.  Loan modifications require an enormous amount of time and communication with the lender and servicer.  Often, documents get “lost in the shuffle” and require follow-up calls.

As a foreclosure defense attorney, one of my services is assistance with loan modifications.  As I tell every potential client, unlike many of my other services, you can do a loan modification on your own. But, if you do not have the time or understanding to do it right, you are often better off getting the assistance of a professional.

In need of assistance?  Contact me today.

Case Summary: Bevilacqua v. Rodriguez (460 Mass. 762)

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.

Practice Pointers: I Think, Therefore I Am [Not Going to Say That to the Court]

Defense attorney Clarence Darrow, Chicago, July 1924

Several months ago, I had the honor of serving as a judge for my alma mater’s appellate advocacy course.  Appellate advocacy is a rite of passage in law school; students are required to write a brief and argue their position in front of a group of mock judges. Your’s truly was Chief Justice of the panel and I had the opportunity to hear fantastic arguments from soon-to-be lawyers.

As a mock judge, I was asked to provide feedback to the students. One of my critiques to the students is especially important in the area of foreclosure defense and I’m sharing it here in hopes that it might be helpful to others.

Many students, in answering the judges’ difficult questions, would often respond by prefacing their arguments with “I think” or—my pet peeve—”I would argue.” The answers they gave to the judges’ questions were fantastic, but these openings made the arguments less effective than they could have been.

Why?  The job of an advocate before a court, either for yourself or for a client, is to argue your side to the court.  Your job is not to do the judge’s job or, even worse, your opponent’s.  When you respond to a judge’s question by stating “I would argue,” you are subtly telling the court that there is another side to the story.  Now, of course there is, but it’s not your job to make it—leave that for your opposition!

When you respond to a judge’s question by stating “I think,” you are now doing the judge’s job; he or she needs to carefully consider the entire argument you are making, but there is no need to remind this to the Court.  Saying “I think” tells the judge that you aren’t confident with your position, which opens the door to the judge looking for reasons to rule against you.

Why do law students, lawyers, and talented pro se litigants do this? Is it because they don’t know what they are doing?  In my opinion, just the opposite is true: those who say “I think” or “I would argue” know the law really, really well, and understand there are two (or more) sides to the story.  And that’s fine….just don’t advertise this to the court.

I’m guilty of this myself.  Not too long ago, I was speaking with an experienced foreclosure defense attorney, who was explaining to me one of his new arguments for fighting foreclosure.  The argument was straightforward, persuasive, and firmly rooted in the law, but I did the worst thing possible: I started arguing the other side.  This attorney stopped me and said it best: “You’re doing their job for them!”

Of course, in making your case, you need to have a good-faith basis in the law, either as a lawyer or pro se party.  Frivolous arguments run the risk of sanctions and, even worse, an angry judge.  Moreover, in preparing your case, you should always consider the opposing side’s potential arguments, so as to make your case stronger.  But, once that’s done, and you are before a court, stick to being an advocate, and only that.

This applies to any area of law, but I consider it especially important in foreclosure defense.  Foreclosure defense is still an emerging field and many these arguments are new to the courts.  Few of these defenses, as I tell my clients, are “slam dunk” wins.  For me, in many of my cases, I believe the law is 110% on my side, but I’m not naive enough to think that an opposing argument could not change a judge’s mind.  With this in mind, I try not to make my job any harder than it needs to be—and neither should you.

Resource Review: Massachusetts Trial Court Law Libraries

Here at The Massachusetts Foreclosure Law Blog, I like to share legal resources that are helpful to lawyers, law students, and pro se parties alike.  The Massachusetts Trial Court Law Libraries is a fantastic resource here in Massachusetts.  The libraries offer an extensive collection of law books, self-help guides, and access to LexisNexis/Westlaw for legal research.  Best of all, it is free of charge.  Highly recommend for all of your legal research needs.

Breaking News: Supreme Judicial Court Issues Bank of America v. Rosa Decision; Permits Counterclaims in Post-Foreclosure Summary Process

The Supreme Judicial Court issued its long awaited decision on whether counterclaims can be brought in post-foreclosure summary process cases.  In Bank of America v. Rosa, the Court held that alleged former homeowners may bring these claims in Housing Court.

A little recap on Massachusetts foreclosure law.  Summary process, a fancy legal term for “eviction,” is an action to obtain possession of property.  In the context of foreclosure cases, summary process comes after the foreclosing entity has performed a foreclosure and is seeking to remove the occupants from the property.  The Supreme Judicial Court has held that a defendant in one of these cases may challenge the foreclosure as a defense to this proceeding.  The question for the Court was whether a defendant could bring a counterclaim in one of these cases (an action where a defendant raises a separate cause-of-action against the plaintiff in the same proceeding).

Summary process law seemed to suggest that counterclaims were permitted only for tenants, and not alleged former homeowners. The Court, however, took a broader interpretation of the law and held that “Housing Court has jurisdiction to hear defenses and counterclaims that challenge the title of a postforeclosure summary process plaintiff, which previously only could have been the subject of an independent equity action in the Superior Court.”

Of course, it is important to remember that in summary process, counterclaims are not compulsory (unlike other civil actions).  So, even though counterclaims now can be brought in these cases, they do not need to be (and, in some circumstances, probably should not be). More on this to come . . .

A few questions remain from Rosa.  The Court’s opinion seems limited to Housing Court, and does does not address summary process cases in District or Superior Court.  Is Rosa limited only to Housing Court, or does it include these other courts as well?  I also wonder whether the Court’s holding is limited solely to summary process cases in Housing Court, or would also cover Housing Court’s general jurisdiction for matters related to a foreclosure.  Rosa, to me, suggests that Court may be open to expanding Housing Court’s jurisdiction to all civil actions challenging a foreclosure, and not merely defenses/counterclaims in summary process.

Res Judicata and Massachusetts Foreclosure Defense: Understanding Your “One Bite at the Apple”

Res judicata is an important topic that comes up in Massachusetts foreclosure law that claimants need to consider in deciding how to defend against foreclosure.
Res judicata is a tricky concept, but can be summarized with an analogy to the criminal law concept of “Double Jeopardy.”  Double Jeopardy comes from the Fifth Amendment of the Constitution (and Ashley Judd) and prevents a defendant from being tried again on the same criminal charges following a legitimate acquittal or conviction.  In short, the prosecution has one shot to make its case and if unsuccessful, can’t have a “do-over.”
Res judicata is the civil law version of “Double Jeopardy.”  This defense prevents a claimant from raising matters that had been raised, or could have been raised, in a prior lawsuit.
Suppose, for example, that Snoopy sues Pig Pen in Suffolk Superior Court for negligence, from Pig Pen making a mess in Snoopy’s dog house.  Based on res judicata, Snoopy will be barred from bringing the same claim in another case later on.  If Snoopy loses his case, he can’t go to another trial court and try the same issue over again, hoping for a better outcome.
That’s not to say he couldn’t appeal this decision.  All parties, as a right, can appeal their cases and ask an appellate court to review the trial court decision for errors of law.  What he can’t do is go to another trial court—such as District Court, Land Court, or Federal Court—and try the same issue over again.
Importantly, res judicata will also bar Snoopy from raising claims that could have been brought in the prior lawsuit.  For example, from the same example above, Snoopy would also be barred from bringing a claim against Pig Pen in another court for nuisance, since he could have raised this issue in Superior Court (along with his claim against Pig Pen for negligence). The test for this is where the claim is based on the same transaction that was at issue in the first action.  Since the claim for Pig Pen’s negligence and nuisance arose out of the same transaction—Pig Pen’s mess—Snoopy will likely be unable to bring this claim again, regardless of how strong of a claim it may be.
Related to res judicata is collateral estoppel, which prevents claimants from relitigating issues that have already been decided in a prior civil action. For example, suppose that in Snoopy’s Suffolk Superior Court case, the Court held that Pig Pen did not have any ownership interest in Snoopy’s doghouse, and this issue was essential in the outcome of the case.  Pig Pen, therefore, would be barred from trying to relitigate this issue in a subsequent case.
For example, if Pig Pen brought a case against Snoopy to seek rent that he claims Snoopy owes him from living in the doghouse (or, to be completely accurate, on the doghouse!), he would be barred from raising the issue over the ownership of the doghouse (which would almost certainly defeat his claim for rent).
Confused?  You’re not the only one; res judicate and collaterial estoppel are challenging concepts for lawyers and judges alike. There is much, much more to these concepts than written above, but here’s the take-home point:
In law, you only get “one bite at the apple.”  This is a popular metaphor for describing res judicata/collateral estoppel and should be remembered when planning a foreclosure defense.   Res judicata and collaterial estoppel prevent claimants from bringing multiple lawsuits based on the same thing.  Just like poor Snoopy above, you don’t get a “do-over” if you make an ineffective case or miss an issue.
This is particularly important for Massachusetts foreclosure defense.  This is because in Massachusetts, homeowners can challenge their foreclosures either in (1) a civil action, as a plaintiff against the foreclosing entity or successor, or (2) in an eviction, as a defense to the foreclosing entity’s claimed right to possession. But, with very, very limited exceptions, you can’t challenge a foreclosure in multiple court cases.  Your one “bite at the apple” is an extremely important factor in a foreclosure defense, and this makes it especially important for claimants to get good legal advice in this area of law.