Jury Trials in Foreclosure Defense Cases

I’m happy to write that I won a post-foreclosure eviction case several weeks ago using a new defense that I had been working on for the past year.  One of the critical reasons for this victory, I believe, was my client’s decision to pursue a bench trial instead of a jury trial—a topic I want to discuss in this blog post.

The right to a jury trial depends on both the type of case and the court that the parties are in.  In Massachusetts, the particular cause of action determines whether a jury trial is available. Eviction (“summary process”) cases, for example, entitle parties to a jury trial.  A party needs to claim their right to a jury trial in the beginning of a case, or it is otherwise waived.

A non-jury trial goes before a judge and is called a “bench trial.”  In a bench trial, the judge hears all of the evidence presented by the parties and, like a jury, determines questions of fact.  For example, in a post-foreclosure eviction trial, the judge will decide whether the foreclosing entity complied with all of the foreclosure requirements.

In a bench trial, as opposed to a jury trial, a judge is required to present his or her findings of fact.  In other words, the judge has to explain the decision that he or she made, as opposed to a jury trial, where the jury only needs to give its verdict.

In my experience, I have found jury trials for foreclosure law issues to be extremely difficult.  The information is dense and difficult to explain to six non-lawyers who likely have no familiarity in this area of law.  More than once, I have seen jurors fall asleep during such trials!

The decision on whether a client should waive their right to a jury trial is theirs alone, and a single blog post cannot offer enough information to make this decision.  The point of this post is to encourage those involved in these cases to give serious thought about whether their case should go before a judge or jury. Rarely do “Perry Mason” moments occur in foreclosure defense; these defenses are often based on mountains of paperwork and uneventful testimony.  Because of this, jurors often may not understand the reasons why the foreclosure is void, even if the defect is crystal clear.  On the other hand, a defense based on a foreclosing entity’s blatant disregard of the law may be enough to excite a jury and therefore justify a jury trial.

With this in mind, give serious consideration to the type of trial you request in a foreclosure defense case.  Better yet, speak with an expert before making this decision.


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.

Foreclosure By Entry

As foreclosure cases increasingly become litigated in Massachusetts, foreclosure by entry—once considered by many to be a mere back-up option—is becoming an important area of foreclosure practice.

Nearly all foreclosures in Massachusetts are foreclosures by power of sale, or “non-judicial” foreclosures.  With the exception of the Servicemembers Civil Relief Act case, meant solely to determine whether a claimant is in the military, a foreclosing entity does not need to bring a court case or obtain a judicial order to foreclose a property.  However, while a non-judicial foreclosure allows a foreclosing entity to obtain title to a property, it must go to summary process (the lawyerly word for an eviction case) to obtain possession of the premises.  In Bank of New York v. Bailey, the Supreme Judicial Court held that a defendant in a summary process case involving a foreclosed property may challenge the validity of the foreclosure as a defense to the plaintiff’s claimed right to possession. This had lead to summary process becoming an active forum for deciding the validity of foreclosures in Massachusetts.  Given the complexity of the issues in these cases, these matters often last well beyond the timeframe for a typical landlord/tenant case.

Foreclosure by entry is another type of foreclosure in Massachusetts. Compared to a foreclosure by power of sale, a foreclosure by entry has far fewer statutory requirements.  Pursuant to G.L. 244 § 1, a mortgagee can obtain a foreclosure by entry by making an “open and peaceable entry” on the mortgaged land.  Then, the mortgagee must record a certificate of this entry in the land records, signed by two witnesses.  The holder of the mortgaged property then has three years from the date that this memorandum is recorded to “oppose” this entry.  If this entry is not opposed, the mortgagee is entitled to foreclosure. While a foreclosure by entry has fewer requirements for foreclosure, this process requires a three year “wait period;” a timeframe that is significantly longer than a foreclosure by power of sale.  In the past, mortgagees would often file a certificate of entry as a backup plan with little expectation of this method being needed for foreclosure.  Often, the mortgagor will have left the property long before this three year period has elapsed.

Today, however, foreclosure by entry promises to take on a greater role in Massachusetts foreclosure law.  Why? With the increased number of foreclosures in the Commonwealth, and the increased number of defenses in these cases, a mortgagee can easily be defending against a foreclosure years after the non-judicial foreclosure occurred.  Challenges to foreclosures are almost always about the non-judicial foreclosure and involve challenges to the foreclosing entity’s standing to bring the foreclosure and whether the involved parties followed the proper notice requirements.  Creeping in the background, however, is the foreclosure by entry.  With the complexity of the issues in these cases, and the backlog of the trial courts, many of mortgagors challenging their foreclosures find themselves getting close to the three-year deadline for challenging the foreclosure by entry.

For a process that has existed for over years, little case law exists on foreclosure by entry and like any challenging area of law, there remains more questions than answers.  One unresolved issue is what constitutes “opposition” for a foreclosure by entry.  Does a mortgagor need to specifically oppose the foreclosure by entry or is an opposition to foreclosure in general enough?  This issue has faced many mortgagors who have diligently challenged their non-judicial foreclosures, but have not specifically addressed the certificate of entry.

It is also unclear whether the Supreme Judicial Court’s U.S. Bank v. Ibanez holding is applicable to mortgagees performing a foreclosure by entry.  Ibanez requires a foreclosing entity to be the holder of the mortgage at the time of the non-judicial foreclosure.  Ibanez’s reasoning would seem to apply equally to a foreclosure by entry, but it remains unclear whether certificates of entry recorded by entity without assignment of the mortgage would equate to a valid foreclosure by entry.

Finally, it also remains uncertain whether the notice provisions for foreclosures, under both statutory law and the terms of most mortgages, apply equally to foreclosures by entry.  The majority of trial court decisions in the Commonwealth have taken the position that non-judicial foreclosures must “strictly comply” with these requirements.  This notice requirements seem to be written broadly enough to cover all methods of foreclosure, but only time will tell if these challenges are effective against foreclosure by entry.

The little case law that does exist regarding foreclosure by entry suggests that any type of opposition is sufficient to challenge a certificate by entry.  To be on the safe side, such opposition should specifically address the certificate by entry and make it certain that the mortgagor objects to this specific method of foreclosure. Demand letters, affidavits, and notices of trespass addressed to the mortgagee all seem to be adequate means of making this opposition. Depending on the registry of lands, a G.L. 183 § 5B affidavit related to land may also be option.