Responding to a 93A Demand Letter

Massachusetts has an important law that is of critical importance to Massachusetts landlords: the Consumer Protection Law.  Commonly known as “Chapter 93A” (where this law is located in the Massachusetts statutes), the Consumer Protection Law prohibits “unfair and deceptive business practices.”  This, as one can tell, is broad language that can cover an infinite number of scenarios.  Courts have construed the reach of Chapter 93A broadly, to include many potential claims that are not otherwise covered by other existing laws.

For a consumer to bring a Consumer Protection Law claim, the claimant must generally send the business a demand letter prior to filing a lawsuit.  For a landlord, responding to a 93A demand letter is incredibly important.  The failure in responding to a 93A demand letter can come with steep penalties if the matter ends up in court.

I always advise a landlord (and anyone else who receives such a letter) to hire an attorney when responding to a 93A demand letter.  Even if the demand appears to be without merit, it is worth having a legal professional ensure that you are handling the complaint properly.  Here are a few points that should be considered when responding to a 93A demand letter.

Is the Landlord Covered Under the Consumer Protection Law?

First, is the landlord covered under the Consumer Protection Law?  The general rule is that a person or business who rents residential space for a fee is engaged in business, and would be subject to Chapter 93A.  However, there is an exception if the landlord lives in the subject property, and is merely renting a unit in the building.  Courts have found that in such cases, the landlord is not a business.  An experienced landlord/tenant attorney can help determine this for you, and whether or not you might be subject to Chapter 93A.

Does the Demand Letter Satisfy the Requirements of a 93A Demand Letter? 

The second inquiry when responding to a 93A demand letter is whether the demand letter satisfies the Consumer Protection Law requirements.  Contrary to popular belief, simply calling a demand letter a Chapter 93A demand does not make it compliant with Consumer Protection Law.  Rather, the law has specific requirements on what needs to go into the letter.  The failure to send a proper demand letter can have severe consequences: in some cases, courts have thrown out a Consumer Protection Law lawsuit for not complying with the demand letter requirement.

Responding to a 93A Demand Letter

Regardless of the above, a landlord should always respond to a 93A demand letter.  Even if the claim is meritless, or the landlord is not covered by Chapter 93A, the failure to respond can be disastrous if the matter ends up in court.

In responding to a 93A demand letter, an attorney can help you determine whether to make a reasonable settlement offer.  Because Chapter 93A generally requires a demand letter before starting a lawsuit, the law (and judges who hear these cases) strongly favor resolution of these matters without litigation.  The Consumer Protection Law gives landlords strong incentives for settling these cases out-of-court, and strong penalties if the court believes that the landlord should have resolved the matter without the court’s involvement.

Conclusion 

Responding to a 93A demand letter is important.  If you find yourself in receipt of one of these demand letters, contact an experience attorney for assistance.

 

MA SJC Issues Important Decision on Consumer Protection Demand Letters

The Massachusetts Supreme Judicial Court issued an important decision on consumer protection demand letters last week, that is of particular importance to Massachusetts foreclosure defense.  The case, Moronta v. Nationstar Mortgage LLC,  is an interpretation of the consumer protection demand letters that are required for Massachusetts’s Consumer Protection Law (a full copy of the decision is below).

Overview of Massachusetts’s Consumer Protection Law

Massachusetts’s Consumer Protection Law (commonly known as “Chapter 93A”) prohibits “unfair and deceptive” practices by businesses.  The scope of this law is broad, and has been used successfully for a variety of consumer protection claims.  For foreclosure defense, Chapter 93A claims have been effective for loan modification denial claims; courts have increasingly allowed these lawsuits based on a loan servicer’s repeated refusal to properly review a loan modification application.

To bring a Chapter 93A claim against a business, a consumer is required to send the business a demand letter and provide them thirty days to make a settlement offer.  These consumer protection demand letters are an essential requirement of this law; courts have thrown out Chapter 93A claims for a claimant’s failure to send one of these letters (or to send a letter that makes a proper demand to the business).

Exceptions to the Demand Letter Requirement

A consumer does not need to send a demand letter if “if the prospective respondent does not maintain a place of business or does not keep assets within the commonwealth.”  The question in Moronta was whether one or both of these two exemptions are needed to avoid sending the demand letter.  As the Court explained: “if the defendant keeps assets in the Commonwealth, but does not maintain a place of business here, must the plaintiff serve a demand letter?”  The Court answered no: either one of these exceptions (no assets or no place of business in the Commonwealth) is an exception to the consumer protection demand letters under Chaper 93A.

How Does Moronta Affect Massachusetts Foreclosure Defense?

Moronta is of particular importance for Massachusetts foreclosure defense.  Because Massachusetts is a non-judicial foreclosure state (where a bank does not need to go to court to do a foreclosure), homeowners often need to go on “the offense” in avoiding foreclosure, through a civil action.  The demand letter requirement under Chapter 93A can be a burden for borrowers who have less than thirty days before a scheduled foreclosure to pursue a legal action.  Moronta will be a help for homeowners with cases against national banks and loan servicers, many of which do not have offices in Massachusetts, and would trigger the exception to the demand letter requirement.

Despite the benefit of Moronta for consumers, I caution consumers (especially homeowners with foreclosure defense claims) from pursuing Chapter 93A claims without the benefit of legal counsel.  Chapter 93A may be intended to help consumers, but consumer protection claims are often still too complicated for a non-lawyer to take on.  Consult an attorney if you believe you have a viable cause of action.

12042

 

Guest Blog Post: How To Preserve Your Right to Challenge a Wrongful Foreclosure in Massachusetts

photo

The Massachusetts Foreclosure Law Blog is proud to have Attorney Uri Strauss guest blog on the Massachusetts foreclosure title clearing bill and its upcoming December 31, 2016 deadline for homeowners who have lost their homes to foreclosure.  Uri Strauss is an attorney at Community Legal Aid in Springfield, MA. He has been a Massachusetts attorney since 2010, and has focused on foreclosure law since 2011.  He may be reached at ustrauss@cla-ma.org.

HOW TO PRESERVE YOUR RIGHT TO CHALLENGE A WRONGFUL FORECLOSURE IN MASSACHUSETTS

If your Massachusetts home has been unlawfully foreclosed, you may need to act very soon to preserve your ability to challenge it.

On November 25, 2015, Governor Baker signed into law An Act Clearing Title to Foreclosed Properties, which amended, among other laws, Massachusetts General Laws Chapter 244, Section 15. In a nutshell, the act aims to force homeowners who have left their homes after a foreclosure to bring their case to court within three years, or lose the right to do so against bona fide buyers. This is a reduction of the previous 20-year period during which people could challenge foreclosures that failed to comply with the power of sale.

The deviltry is in the details of this confusing law. This post aims to clear up some of the confusion, and especially to help homeowners identify if they need to act before December 31, 2016 when the first set of people will lose their rights. The other point of this post is to warn people against misinformation about what they need to do to preserve their rights. In all cases, you should consult an attorney, if possible, about your particular situation. I am offering guidance in general, not legal advice for your particular situation.

My aim is to respond to three questions: Who needs to act before December 31? How does a homeowner need to act to preserve his or her rights? And who is entitled to challenge the foreclosure?

Who needs to act before December 31?

If it has been fewer than three years since the foreclosure affidavit has been recorded in your registry of deeds, you do not need to act before December 31 to preserve your rights. You will have until at least three years after the recording of the affidavit. However, if you are already in court in a foreclosure challenge, it is a good idea to record your pleadings. See below for details about the foreclosure affidavit, and about what it takes to challenge the foreclosure.

If it has been three or more years since the foreclosure affidavit was recorded, you need to act to preserve your rights if you fall in one of the following three categories.

  1. People who have moved out of their homes, without the validity of the foreclosure ever being litigated.
  2. People who are currently in litigation over the validity of their foreclosure.
  3. People who have litigated the validity of their foreclosure and won, when there is no deed granting the property back to the owner after foreclosure.

Please note that most lenders and servicers will also conduct a foreclosure by entry at the same time as the foreclosure auction, and that foreclosure is effective after 3 years if it is not opposed. Foreclosure by entry is a whole separate and complicated topic, and I won’t get into it here. If you intend to challenge a foreclosure, be certain to contact your local anti-foreclosure group and/or an attorney about it well before three years have passed.

If you are currently in litigation, do not assume that you are protected. Do not assume that your attorney has thought to take the necessary steps to protect you. Raise the issue with them. Depending on how courts interpret the law, you might get away with missing the deadline if you win your case, but it is risky to rely on it.

You may notice, if you read the amended M.G.L. Chapter 244, Section 15, that only bona fide third party buyers, and not the lender or related organizations like Fannie Mae or Freddie Mac, have the benefit of the new law. Do not rest assured just because the bank or a related entity has bought your property at foreclosure and has not sold it. As I read the law, your failure to act by the deadline, followed by a sale to a third party, eliminates your right to challenge the foreclosure once it is sold. In other words, your title can be laundered while in the bank’s control, then sold clean to a third party buyer.

The three-year clock starts ticking when the mortgagee records an affidavit of sale in the registry of deeds. The affidavit of sale you are looking is usually recorded together with the foreclosure deed as a document type called “Foreclosure Deed/Affidavit”. It might be titled something different than “Affidavit of Sale.” The affidavit identifies the mortgage that was foreclosed, says that the conditions of the mortgage were not performed, and states that notices were published in a newspaper on three dates and sent by mail to the required parties. A copy of the newspaper publication is attached to it as an exhibit. Do not confuse this affidavit with other affidavits that may have been filed, such as an affidavit concerning the note (also called an “Eaton” affidavit), an affidavit concerning compliance with M.G.L. chapter 244, section 35B, an affidavit certifying compliance with 209 C.M.R. section 18.21A, or an affidavit concerning the right to cure (also called an “Pinti” affidavit).

It is the opinion of some respected attorneys that the affidavits of sale typically filed by mortgagees do not start the clock running, because they do not, as the law requires, “fully and particularly stat[e] the acts” done to foreclose the property. The affidavits are usually brief, do not fully state the facts, state legal conclusions instead of facts, and are made by people who do not have firsthand knowledge of the facts. I believe that this is a mistake, and that the courts will accommodate this failure by the banks to comply with the law, just as they have done with almost every other failure that they have considered.

How does a homeowner need to act in order to preserve his or her rights? 

To preserve your right to challenge your foreclosure, it is necessary to record the relevant *pleadings* in the registry of deeds. It is not enough to record an *affidavit* in the registry, as the Massachusetts Alliance Against Predatory Lending (MAAPL) has been informing people. The law is very clear that pleadings must be filed.

What is the difference? An affidavit is a sworn statement of facts based on personal knowledge. A pleading is a document filed in court in which legal claims are made. The purpose of the new law is to force people to litigate their claims by the deadline, not simply to make a sworn statement and record it in the registry of deeds. If your deadline is coming up and there is no existing litigation, you need to create litigation by filing a lawsuit. What is more, if you want to actually succeed, you need to file a good case. That means that you need to have a good argument based on your particular circumstances. It will not do to use far-fetched theories of the kind that often circulate on the internet. It is important to speak to an attorney to determine whether you have a good legal argument.

Note that to be valid, the pleadings should be from a court case from a court of competent jurisdiction. In my view, if you challenged the foreclosure as a defense to foreclosure proceedings in Housing Court, that is definitely an appropriate court. If it was in a state district court, that is almost certainly an appropriate court. If you were the plaintiff and you filed your case in Superior Court, Land Court, or the federal District Court, you are probably fine. If it was any other court, consult an attorney about whether it was a court of competent jurisdiction.

That means that if you fall into category (1) above, you need to file a lawsuit in the next few weeks, and record an attested copy of your complaint, to avoid losing your home. If you are in categories (2) or (3), your task is easier. You need to get an attested copy of your complaint, if you were the plaintiff, or of your answer, if you were the defendant, from the clerk’s office of the court in which the litigation is taking place or took place. If the complaint or answer was amended, make sure to get the most recent version, since the complaint or answer should state the foreclosure challenge that the court ruled on, or that you hope the court will rule on.

If you have fought and won your case, you still need to record the *pleadings*, rather than the court’s judgment, in the registry. You might think it makes more sense to record the judgment, in which the court states that it finds in your favor. I would agree, but that is not what the law says you need to do.

According to the law, you need to record a “true and correct” copy of the pleading in the registry of deeds. Does this mean that you can rely on just a photocopy of the pleading? In my view, yes – but the challenge is to get the registry of deeds to record it. The registry is not required to accept any piece of paper you hand to it. The new law requires registries of deeds to accept and record attested copies of pleadings, and this is what I recommend. “Attested” here presumably means attested by the court in which the case is being decided. It may be possible to preserve your rights under the act by signing an affidavit under M.G.L. Chapter 183, section 5B, attaching the pleading is an exhibit, swearing that it is a true and correct copy of a document filed in the court, and having it certified by an attorney as bearing on title – but I recommend getting an attested copy to be on the safe side.

To get an attested copy of your pleading, first call ahead to the court in which your case is being heard and let them know you want this. They might ask for a couple of hours to create an attested copy. Then show up and get your copy. It currently costs $2.50 per page to get attested copies of court documents. If you are poor, low-income or on state assistance, you may qualify for a waiver of fees – ask the court about it. Then go in person to the Registry of Deeds in your district, and ask them to record it. Take a printed copy of the statute – Massachusetts General Laws, Chapter 244, Section 15, Subsection (d) – with you. Registries of Deeds have not historically accepted attested copies of pleadings for recording, so you may need to show them the law that says they need to. I believe the cost of recording the document is $75. You can ask the Registry of Deeds about waiver of fees for poor, low-income or state-assisted people as well.

Who is entitled to challenge the foreclosure?

To be eligible to challenge the foreclosure, you need to be a person entitled to a notice of foreclosure, which means that you need to be the person who gave a mortgage to the lender (which is not necessarily the same as the person who obtained the loan), or else a person who held an interest in the property junior to the mortgage more than thirty days before the foreclosure sale. Based on this statute, you are not entitled to challenge the foreclosure if you are the spouse of the mortgagor, the child of the mortgagor, or the tenant of the mortgagor, unless you yourself are a mortgagor, or you happen to have a junior lien on the property.

This represents an apparent change in the law. It used to be the case that if a foreclosure was void, any person whose rights were affected by it – a spouse, a child, a tenant, a long-term guest – could challenge its validity. The new law clearly restricts it so that only persons entitled to notice can challenge the foreclosure.

What about after the pleadings are recorded?

If you have recorded your pleadings challenging a foreclosure within the time limit, do you have the benefit of the previous 20 year rule? Not necessarily. There are at least two ways a foreclosure can be undone by a court. A foreclosure is void if it is not conducted strictly in accordance with the power of sale, or if it fails to comply with preconditions to foreclosure stated in the mortgage. Void foreclosures can be challenged up to 20 years afterwards. A foreclosure is voidable if the power of sale and the preconditions in the mortgage are complied with, but the manner in which it was conducted was fundamentally unfair or perhaps violated some other law. In all likelihood, you need to assert a claim to undo a voidable foreclosure within the statute of limitations of some other law. For example, if you have a claim under the consumer protection statute, M.G.L. section 93A, there is a four year statute of limitations from the time of the unfair or deceptive act. If you have a tort claim, you may have to bring the case within three years. You should consult an attorney about whether your unlawful foreclosure claim is a claim that the foreclosure was void or voidable.

Everything in this article is directed at what it takes to preserve your claim of illegal foreclosure. Of course, it is not enough to have your case in court. You need to actually win your case in order to undo the foreclosure. The legislature has set up a tough procedure for illegally foreclosed homeowners to undo the harm that was done to them. It might seem very unfair that a bank can abuse you, deceive you, and illegally foreclose on you without going to court, yet you have to go to court and follow an unclear procedure just to avoid losing your home. For better or worse, this is the process that your elected representatives have chosen to impose on you, so you need to take care to comply with it.

Fannie Mae v. Rego: Supreme Judicial Court Permits a Chapter 93A Defense to Foreclosure

 

SJC

The Massachusetts Supreme Judicial Court issued Fannie Mae v. Rego today, an important foreclosure law decision that permits a Chapter 93A defense to foreclosure (full copy of the decision is below).  Chapter 93A, the common name for Massachusetts’s Consumer Protection Law, is a broad consumer statute that prohibits “unfair and deceptive practices” by businesses.  Chapter 93A claims are commonly used for monetary damages, and can provide an an award of treble damages against a party who violates this law (along with attorney fees).  The question for the Court was whether a Chapter 93A defense could be raised to void a foreclosure (as opposed to simply awarding a party money).

Rego  was an appeal of a post-foreclosure eviction (“summary process”) case, where the homeowner was defending against the eviction of his home on the grounds that the foreclosure was void.  The homeowner brought a counterclaim (a lawsuit brought in the same case against the original party who filed the suit) for violation of the Consumer Protection Law.  Here, the trial court dismissed this counterclaim, without offering a real reason for doing so.  The Supreme Judicial Court held in Rego that a homeowner is permitted to raise a Chapter 93A defense in a eviction foreclosure case that goes to the issue of possession of the property; in other words, whether the foreclosure was done correctly.  If this is the relief sought by a Chapter 93A claim, Rego suggests that it can be raised in a post-foreclosure eviction case.  If the Chapter 93A merely seeks monetary damages, such a claim is not allowed in one of these cases (and would have to brought separately).

Rego, in my interpretation, is an important decision because it clarifies that a Chapter 93A claim may be used to void a foreclosure sale.  Many lawyers (and some judges) are not aware that Chapter 93A provides a court with equitable relief.  Equitable relief  is a remedy that goes beyond money damages, and requires a party to act or refrain from performing a particular act.  This type of relief is especially important in foreclosure defense, where the homeowner isn’t looking for money as a defense to foreclosure; the homeowner instead wants the foreclosure reversed.  Rego, in my interpretation, holds that there is a Chapter 93A defense to foreclosure; something that was less clear before today’s decision, where some trial courts took the position that money was the only award from a foreclosure that violated Chapter 93A.

 Rego also decided another issue of foreclosure law: whether an attorney could perform a foreclosure on behalf of a mortgagee without written authorization.  The relevant foreclosure law, G.L. c. 244, Section 14, seemed to suggest that such a writing was required for attorneys who performed foreclosures.  The Supreme Judicial Court held that no such writing is required, and that legal counsel may perform the steps of the foreclosure process without written authorization.  Although the bulk of  Rego was spent on this narrow issue of law, the Court’s decision is unsurprising:  I am aware of only one trial court decision that came out in the homeowner’s favor on this argument (with the overwhelming majority following the reasoning of  Rego).

 Rego

Guest Blog Post: Clark v. Leisure Woods Estates, Inc.

 

1093742

The Massachusetts Landlord Tenant Blog is proud to have Attorney Joseph N. Schneiderman guest blog on the Massachusetts Appeals Court’s recent Clark v. Leisure  Woods Estates, Inc. decision, an appeal involving the important issue of damages in landlord tenant cases.  Attorney  Schneiderman is an appellate attorney licensed in Massachusetts and Connecticut and may be contacted at connlawjoe@gmail.com.

Appeals Court Partially Affirms and Vacates Damages To Tenants At Manufactured Housing Community in Orange

On February 23, 2016, the Massachusetts Appeals Court decided Clark v. Leisure Woods Estates, Inc., 89 Mass. App. Ct. 87 (2016). (full copy of the decision is below).  Justice Gregory Massing wrote for a unanimous Court and held that a Housing Court judge properly awarded treble damages under G.L. c.93A for breaches of the covenant of quiet enjoyment but erroneously awarded each household two triple rent awards under G.L. c.186, §14.

Leisure Woods Estates is a large manufactured housing community in Orange, Franklin County, home mainly to senior citizens.  Id. at 88. Residents own their own units but pay a monthly rental fee for the lots. Id.  Twenty-two residents sued Leisure Woods in the Western Housing Court over conditions there and a three-day bench trial followed. Id. at 89. On the last day, Leisure Woods’ president, Glenn Gidley, was set to testify but did not arrive at court until plaintiff’s counsel began her summation. The judge refused to reopen evidence to permit Gidley’s testimony.  Id. at 95.

The judge found that Leisure Woods committed “three distinct violations” of the convent of quiet enjoyment codified in Section 14. First, since 2007, Leisure Woods blocked access to common walking trails, which had been their selling point. Second, Leisure Woods permitted retaining walls to collapse, walkways to deterioriate, and flooding, which were particularly aggravating to Leisure Woods’ aged population. Third and finally, Leisure Woods “chronically failed” to clear snow and ice, causing potholes and impassable roads. Id. at 89. Leisure Woods appealed, asserting that (1) the Housing Court judge erred in determining damages and (2) in barring Gidley’s testimony.

The Appeals Court recalled that “an injury party may recover damages for claims or injuries that are ‘factually separable and distinguishable [but not] multiple awards for the same injury based on different theories.” 89 Mass. App. Ct. at 90-91. Section 14 permitted a tenant to recover either “actual and consequential damages [of] all reasonably foreseeable [personal and economic] losses”, or, three months rent, if the tenant could not calculate actual damages. Id.  Against this backdrop, the  plaintiffs had not received “repeated [or otherwise duplicative] damages for each rental period, but rather one triple rent award for each of two factually distinct breaches.” Id. at 92.

However, the Appeals Court held that “only one triple rent award is available in a single proceeding under §14, no matter how many ways the landlord interferes with the tenant’s quiet enjoyment.” Id. at 92-93, citing Simon v. Solomon, 385 Mass. 91, 112-113 (1982).  Since the plaintiffs could not prove actual damages, only one triple award was proper-unless Leisure Woods continued to violate Section 14.  Id. at 93, n.6.

Turning next to c.93A, the trial judge had found that Leisure Woods willfully and knowingly failed to repair extensive pot holes and permitted snow and ice to accumulate. 89 Mass. App. Ct. at 89. Leisure Woods contended that natural snow accumulation in and of itself could not constitute a defect. Although the Appeals Court noted that this specific position was of dubious merit in light of recent caselaw, the Appeals Court instead concluded that Leisure Woods’ conduct violated the Attorney General’s regulations on manufactured housing requiring maintenance of community roadways promulgated pursuant to c.93A. Id. at 93, and n.7. Because the regulations required removal of snow and pothole repair,  “overwhelming evidence” of damaged roads caused by these conditions made the treble damages award appropriate. Id. at 94.

Finally, the judge did not abuse his discretion in refusing to permit Gidley to testify. The defendants had multiple opportunities to bring Gidley to court timely that they missed, despite the judge calling a recess and tending to other matters. Because Gidley did not arrive until summations, the judge correctly precluded his belated testimony because it would likely prejudice the plaintiffs. Id. at 95-96.

Two open issues emerge from this case. First, although a landlord may commit multiple breaches of the covenant of quiet enjoyment, only one default award of triple rent is available under Section 14, unless the breach survives the initial suit-or actual damages can be calculated. 89 Mass. App. Ct. at. 93, n.6. Although this rule will avoid duplicative damage awards, it does not appear to incentivize the landlord to remedy the breach-and may undervalue a tenant’s damages, frustrating the purpose of Section 14.

Second, does negligent snow accumulation in and of itself breach the covenant of quiet enjoyment? As the Court noted, the law of premises liability no longer distinguishes between natural and unnatural snow accumulation. 89 Mass. App. Ct. at 93, n.7, citing Papadopoulos v. Target Corporation, 457 Mass. 368 (2010). In light of that case and the attendant hazards of snow accumulation to tenants and visitors from snow accumulation, such accumulation should constitute a freestanding breach of the covenant of quiet enjoyment. Papadopoulos, 457 Mass. at 382-384. Given the severe winters of 2014-2015, landlords should take care to clear snow or risk a litany of litigation.

Joseph N. Schneiderman has an appellate practice “on circuit” in Massachusetts and Connecticut.  Joe gratefully thanks Adam for the opportunity to guest blog!

Decision

Overview of the Massachusetts Foreclosure Title Clearing Bill

Image result for ma legislature

Governor Baker signed into law the Massachusetts Foreclosure Title Clearing Bill last week.  This bill, which supporters have been trying to pass for years, imposes a deadline for challenging the validity of foreclosures in Massachusetts.  Here, I’ll present an overview of the Massachusetts Foreclosure Title Clearing Bill and what homeowners and lawyers need to know about this new law.

Background

The Massachusetts Foreclosure Title Clearing Bill is largely the direct result of the Supreme Judicial Court’s U.S. Bank v. Ibanez decision, which invalidated thousands of foreclosures across Massachusetts.  In Ibanez, the Supreme Judicial Court held that a mortgagee needs a valid assignment to perform a foreclosure, and the failure to have one at the time of foreclosure makes the foreclosure void.

The Supreme Judicial Court later held in Bevilacqua (a companion case to Ibanez) that a defective foreclosure can’t be fixed by simply going to court and asking the court to fix the problem.  The result of this made it extremely difficult to correct a void foreclosure. Consequently, homeowners who purchased these improperly foreclosed homes were stuck with properties that had bad title.

New Deadline for Challenging a Foreclosure

The Massachusetts Foreclosure Title Clearing Bill imposes a new deadline for challenging a foreclosure (akin to a statute of limitations).  Under this law, a homeowner has three (3) years from the recording of the affidavit of sale in the land records (usually done several months after the foreclosure sale) to challenge the foreclosure.  For foreclosures that occurred over three years before the effective date of this new law, homeowners have one (1) extra year to raise a foreclosure challenge.

A challenge to foreclosure can be brought on the offense (as a lawsuit against the foreclosing entity) or the defense (as a challenge to an eviction case brought by the bank, on the basis on a lawful foreclosure).  The law recognizes either type of action as a basis for challenging a foreclosure.

This law, importantly, is only about a homeowner’s right to reverse a foreclosure; the law does not impose a deadline on lawsuits bought solely for monetary damages.  The law recognizes that violations of Massachusetts foreclosure law are violations of the state’s Consumer Protection Law, which allows for monetary damages.

What is Required Under this New Law

The Massachusetts Foreclosure Title Clearing Bill requires a homeowner to bring a defense to a foreclosure within three (3) years of the foreclosure sale, or forever be barred from doing so.  The law requires a former homeowner to record a true and accurate copy of their lawsuit in the local registry of deeds in order to meet this deadline.

Possible Legal Challenges 

Now that the Massachusetts Foreclosure Title Clearing Bill is law, several legal challenges are expected to be raise against the legality of this bill.  Stay tuned.

Take Home Lesson

 

What’s the take home lesson of the Massachusetts Foreclosure Title Clearing Bill?  Sooner is always better than later in addressing a foreclosure. If you are a homeowner who may be impacted by this new law, contact me for a consultation.  The risks of not acting soon enough are greater than ever, and homeowners who have valid foreclosure defenses should not delay in acting on these important matters.

Firm News: Sherwin Law Firm Succeeds in Raising Foreclosure Defense Claims for Massachusetts Homeowner

I’m pleased to write that I recently won a decision from Plymouth Superior Court allowing me to raise foreclosure defense claims against a servicer and lender who claimed to have performed a lawful foreclosure against my client.  These claims resulted from the servicer’s repeated refusal to consider my client for a loan modification, despite my client following up with the requested paperwork requests for over nine months.  I raised claims under Massachusetts’s Consumer Protection Law (“Chapter 93A”), promissory estoppel, and breach of contract.
The battle is far from over.  Here, the Court has merely allowed me to proceed with litigating these claims; it doesn’t mean I have won . . . yet.  However, I am pleased to get this case off the ground.  Often, one of the toughest parts of foreclosure defense is convincing a court that you have claims worth pursuing.  I can’t say whether my lawsuit will be successful, but I’m looking forward to giving my client her day in court on these important matters.
Are you facing a foreclosure related to a loan modification denial? Contact me right away for a consultation.