Pinti v. Emigrant Mortgage: Strict Compliance Required for Paragraph 22 of the Standard Mortgage


The Supreme Judicial Court issued its long awaited decision last week in Pinti v. Emigrant Mortgage, holding that a foreclosing entity needs to strictly comply with paragraph 22 of the standard mortgage.  (DISCLAIMER:  I represented the plaintiffs in Pinti in their Superior Court case).
The “standard mortgage” is the mortgage form used for almost all residential mortgages and comes from Fannie Mae/Freddie Mac (two of the largest holders of mortgages in the United States). Paragraph 22 of this mortgage requires the mortgagee to provide the homeowner with a default notice prior to foreclosure, containing specific disclosures.  These disclosures include:
  • A thirty-day right to cure the loan default
  • The borrower’s right to reinstate after acceleration of the loan
  • The right to bring a court action to assert the non-existence of a default or any other defense to acceleration and the foreclosure sale

The default notice in Pinti incorrectly stated one of these disclosures.  The question for the Court was whether strict compliance was required for this notice.

This matter of strict compliance was the make or break issue for this case.  The plaintiffs in Pinti, like most homeowners, could not show prejudice for this type of error (as in, they could not show that this error was the direct reason why the foreclosure occurred).   To have a viable claim, the plaintiffs in Pinti needed to show that any failure to comply with this notice made the foreclosure void.  The Supreme Judicial Court agreed that this heightened standard of review is necessary for paragraph 22.Many people following this case (myself included) expected the Court to decide the case similar to U.S. Bank v. Schumacher, where the Court held that the statutory right-to-cure notice (which comes from Massachusetts law, and not the mortgage itself), was not a part of the foreclosure process, and therefore not requiring strict compliance.  The important difference was that the disclosure requirement in Pinti came from the mortgage itself.

The Court made Pinti prospective:  it applies to only notices sent after July 17, 2015 (the Court left the question open as to whether those homeowners who have raised this defense when the Pinti decision came out are also entitled to the benefit of this holding).
So, what are the take home lessons of Pinti?
  • The Supreme Judicial Court reaffirmed that strict compliance is required for the terms of the mortgage.  Beyond the default notice requirement of paragraph 22, Pinti could also have implications for other requirements in the standard mortgage.
  • Real risks comes in purchasing a foreclosed property.  The buyer of the home in Pinti was a third-party buyer (someone other than the foreclosing entity).  Anyone considering buying a foreclosed property should hire an attorney and get a title insurance policy.
Are you facing foreclosure?  Contact me to see if the Pinti decision (or another foreclosure defense) can help you save your home.