Fixing a Foreclosure Problem in Massachusetts

Challenging a Foreclosure

Fixing a foreclosure problem is a matter that may be necessary if a mistake is made in the foreclosure process. If such a mistake occurs, and the foreclosure is void, the buyer does not have full ownership of the property, which will prevent them from evicting any of the occupants or selling the home at a later date.

Fortunately, there are options available for fixing a foreclosure. As someone who has both helped buyers of foreclosed properties with these matters, and homeowners attempting to avoid foreclosure, I know many of the common pitfalls in this area of law.

Overview of Foreclosure In Massachusetts

Massachusetts is a non-judicial foreclosure state. This means that, unlike many other states (such as New York and Vermont), a lender does not need to go to court to foreclose. Rather, a lender can foreclose through a series of legal notices and a public auction sale.

The requirements for a foreclosure in Massachusetts are detailed and must be strictly complied with. Even a minor, innocent mistake can be grounds for arguing that a foreclosure is void.

Common Errors In Massachusetts Foreclosures

Common errors in Massachusetts foreclosures include, but are not limited to, the following:

For a third-party buyer of a foreclosed property, these defects can be problematic. Even though the lender made the error, such defenses can be used against the subsequent buyer of the foreclosed property, to challenge the home’s ownership.

Fixing a Foreclosure: What Can Be Done?

The first step for attempting to resolve a foreclosure problem is to try and negotiate with the former homeowner, if possible. If the former homeowner no longer lives in the home, or has no interest in keeping the property, it may be possible to reach an agreement where ownership of the home can be resolved.

If this is not possible, a court action will likely be necessary. In such a case, a third-party buyer can ask a court to quiet title for the property or allow it to perform a new foreclosure sale.

Final Thoughts

Addressing an issue with a foreclosure should never be done without an experienced attorney’s help. If you need assistance with such a matter, contact me for a consultation.

What Is Needed for a Declaratory Judgment in Massachusetts?

foreclosure appeal

The Massachusetts Appeals Court issued an important decision last week on what is needed for a declaratory judgment.  The decision comes from a foreclosure law case, but just as easily applies to other areas of law.  The decision, Wells Fargo v. Mulvey, is included below.

What is a Declaratory Judgment?

A declaratory judgment, simply put, is a court order that resolves a legal uncertainty.  Pursuant to G.L. c 231A, § 1:

The supreme judicial court, the superior court, the land court and the probate courts, within their respective jurisdictions, may on appropriate proceedings make binding declarations of right, duty, status and other legal relations sought thereby, either before or after a breach or violation thereof has occurred in any case in which an actual controversy has arisen and is specifically set forth in the pleadings and whether any consequential judgment or relief is or could be claimed at law or in equity or not . . .

Declaratory judgments are often requested when the desired remedy for a case is more than simply money.  For example, in the context of foreclosure defense, money alone will not help someone who wrongfully lost their home to foreclosure . . . that party wants the home back, not money.  In such a case, the party can request a declaratory judgment stating that the foreclosure was wrongful, which has the full force of law.

For real estate cases, declaratory judgments are often recorded in the land records, which becomes part of the property’s title.

Overview of Case

In this case, Wells Fargo requested a declaratory judgment as to whether it could perform a non-judicial foreclosure against a homeowner.  The bank was concerned that its mortgage did not include the necessary language permitting such a foreclosure.

Importantly, the home owner in this case never filed an answer or response to the bank’s motion.  The bank sought a default judgment and requested what it asked for: a declaratory judgment allowing it to foreclose.

What is Needed for a Declaratory Judgment?

Not so fast, said the Court!  Although the homeowner never responded to the lawsuit, the court, on its own, declined to give the bank a declaratory judgment.  The reason for doing so answers this important question: what is needed for a declaratory judgment?

A declaratory judgment requires there to be an actual controversy for a court to resolve.  Here, because the bank presented no evidence to conclude that its right to foreclose against the homeowner was in question, this was not a matter appropriate for a declaratory judgment.

Practical Implications

As someone who often requests declaratory judgments in my cases, this decision is an important reminder of the need to properly prepare such lawsuits.  Failure to do so can result in dismissal of the case.  This decision is clear that a court can do this entirely on their own, even if the opposing party never raises this concern.

If you find yourself involved in a legal dispute concerning a declaratory judgment, contact me for a consultation.

Wells Fargo v. Mulvey