Massachusetts SJC ruling could further complicate foreclosure disputes

The state’s top court on Monday ruled in favor of a Canton woman fighting her foreclosure in a decision that puts more pressure on lenders to clean up seizure procedures, but also complicates efforts for borrowers to seek court relief from property take-backs.

The decision adds to several rulings made by the Supreme Judicial Court over the last several years that require foreclosing lenders to have proper paperwork in place before seizing a home.

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In this case, the Massachusetts Supreme Judicial Court ruled that the lender, HSBC Bank USA, did not have standing to start a foreclosure process against homeowner Jodi B. Matt because it couldn’t prove that it held the mortgage on her house.

Under state law, foreclosing lenders are required to file a complaint in court under the state’s Soldiers’ and Sailors’ Civil Relief Act. That law offers certain legal protections to those who serve in the military. The lower court judge, Keith C. Long, ruled that HSBC may not have been the legal mortgage holder but had “a contractual right to become (the) holder” and therefore could start the foreclosure process.

The seven-member top court disagreed.

“We conclude that only mortgagees or those acting on behalf of mortgagees have standing to bring service member proceedings,’’ the court wrote in a decision authored by Judge Barbara A. Lenk.