LEGISLATURE PASSES ACT CLEARING TITLE TO FORECLOSED PROPERTIES TO ADDRESS IBANEZ CASE

Published on: January 22, 2015

Senate Bill 1987 Passes Legislature at Midnight Hour

Senate Bill 1987, sponsored by Shrewsbury State Senator Michael Moore and the Massachusetts Land Title Association, would render clear and marketable to any title affected by a defective foreclosure arising out of the U.S. Bank v. Ibanez ruling. Estimates are that hundreds of innocent homeowners are affected by paperwork errors by foreclosure lenders, rending them unable to sell or refinance their homes.  The issue created by the infamous Ibanez decision and its progeny is that the banks are now required to have executed Assignments on record and possession of Promissory Notes prior to foreclosure.  Ibanez has invalidated or rendered uncertain numerous foreclosures despite the fact nobody objected to the foreclosure sale.  It has had a deleterious effect on the Massachusetts economy.  The decision has been utilized by numerous homeowners to remain in their homes while not paying their mortgages.

The Legislature passed the somewhat controversial bill at the midnight hour on July 31, the last night of the legislative session. The bill moves on to the Governor’s desk where housing advocates are still lobbying for rejection of the bill. The housing advocates’ arguments really show a complete lack of understanding of the title defect problem and its disastrous effect on the housing market.  The bill preserves the right to challenge foreclosures and sue the banks, while helping innocent homeowners who are stuck with bad title.  Stay tuned for future development in next month’s issue.

For more information please contact Ed Allcock at eallcock@meeb.com.