The latest on real estate recordings and new technology from the Middlesex North Registry of Deeds in Lowell
A decision issued by the Land Court on March 26, 2009 has thrown into question the quality of many property titles that were derived from recent foreclosures. This issue in the case, US Bank NA v Ibanez, was whether a Notice of Mortgagee’s Sale of Real Estate published and a subsequent auction conducted prior to the mortgage actually being assigned to the purported mortgagee conducting the foreclosure complied with G.L. c.244, s.14 and thus conveyed good title as a result of the foreclosure auction. The court ruled that where an assignment had not been executed prior to the first publication of the notice of mortgagee’s sale, the subsequent foreclosure auction was invalid. The court reasoned that given the potential difficulty in obtaining proper assignments in this world of the rapid transfer of mortgage loans amongst financial institutions, failure of the mortgagee to have actual possession of the assignment at the time the notice of sale was first published, and certainly when the auction occurred, would cause potential bidders to avoid participating in the sale or at least diminish their bid for the property, all to the detriment of the mortgagor’s interest (and subsequent liability for any deficiency). Given the turbulent nature of the mortgage industry over the past six years and the lack of diligence involved in executing and recording assignments, this decision could throw the validity of many foreclosed properties. Here’s an online copy of the Land Court’s decision.
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