Judge reaffirms crucial foreclosure sale ruling
A Massachusetts Land Court justice's ruling today puts into question the ownership of hundreds -- and possibly thousands -- of foreclosed properties in the state.
Justice Keith C. Long affirmed his own March decision that invalidated foreclosure proceedings involving two Springfield homes because the lenders did not hold clear titles to the properties at the time of sale. In today's reconsideration of that ruling, Long described a convoluted process in which ownership of the mortgages changed multiple times without being properly recorded. He said the problems lenders now face are "entirely of their own making," and if they seek a change in law they should look toward the Legislature.
"The issues in this case are not merely problems with paperwork or a matter of dotting i's and crossing t's,'' Long said in a 27-page decision. "Instead, they lie at the heart of the protections given to homeowners and borrowers by the Massachusetts Legislature."
The decision comes seven months after Long's initial ruling, which came as a shock to many who deal with distressed properties. Lenders believed they could complete foreclosure transactions and later produce formal proof they held the mortgages. Since March, some lenders have stopped selling foreclosed properties out of fear the sales later could be voided, and title companies have refused to insure them. The logjam has impaired efforts by communities and nonprofits to buy and rehabilitate foreclosed homes in some of the state's hardest hit areas. It has also made it difficult for individuals to buy foreclosed homes.
Read the full text of the ruling here.