Homeowners have the option of challenging the validity of their foreclosures in a civil action case. A common cause of action that foreclosure attorneys bring in these case are declaratory judgments.
A declaratory judgment, simply put, asks the court to make a legal determination that resolves legal uncertainty for the parties. Under Massachusetts law, the power to make a declaratory judgment is broad and covers a broad array of matters. For pre-foreclosure defense cases, I often ask for a declaratory judgment that the foreclosing entity is not entitled to perform a foreclosure of my client’s home and in post-foreclosure cases, a declaratory judgment that the foreclosure is void because the foreclosing entity did not comply with the terms of the mortgage and/or applicable foreclosure statutes.
An important requirement for requesting a declaratory judgment is that all parties “who have or claim any interest which would be affected by the declaration” need to be a party of the lawsuit. For foreclosure cases, this often means that all parties to the mortgage and all entities involved in the foreclosure need to be included in the lawsuit. For post-foreclosure cases where my clients have tenants, I include them as well, as the validity of the foreclosure would affect the tenants’ landlord/tenant relationship.
The purpose of a declaratory judgment is “to remove, and to afford relief from, uncertainty and insecurity with respect to rights, duties, status and other legal relations . . .” A court issues a declaratory judgment through a simple court order stating its legal determination on the disputed issues. In foreclosure cases, a declaratory judgment holding that a foreclosure was void can be recorded in the Registry of Deeds and has the effect of restoring the homeowner’s title to the property.
Declaratory judgments can be raised in Superior Court, Land Court, and Federal Court. I find declaratory judgments to be useful in foreclosure defense cases because they provide resolution to matters of law that do not always fit in with other kinds of causes of action.