SJC-10694 06 Amicus Attorney General Brief

8/2/2019 SJC-10694 06 Amicus Attorney General Brief

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COMMONWEALTHF ~ ~ S S A C H U S E T T SSUPREMEUDICIAL COURTSUFTOLK, ss. NO . 10694

I1.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR T I ESTRUCTURED ASSET SECURITIES CORPORATION MORTGA GE PASS-TIIROUG II CERTIFICATES, SERKS 2006-2,

Plaintif-App pellunl,V .

ANTONIO IRANEZ,Defendant-Appellee.

WELLS FARGO BANK, N.A. ,AS TRUSTEE FOR AllPC 2005-OFT 1 TRUST,U F C ASSKI' BACKED CERTIFICATES SEIUES 200S-OPT I,Pluint#Appellant,V

MARK A. LARACE AN D TAMMY L. JARACE,Defendants-Appellees.

ON APPEAL FROM A JUDGMENT OF THE AN D COURT .

BRXEF OF TIW ATTORNEY G E N E W ON BEHALF O F THEC O M M O ~ A L ' l W P MASSACHUSETTS, AMICIJS CURIAE

MhRTHA COAKLEYAlhrney GeneralJohnM. Stephan (UUO No. 649509)Assistunt Attorney GeneralPublic Protection and Advocacy BureauConsum er Protection DivisionOne Ashburton Place, 18thFloorBoston, Massachusetts 02108-1598(617) 727-2200 ext. [email protected] 20,2010


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T a b l e of Content sT,able of Contents ..................................... iTable of Authorities ................................. iiiIssues Presented ...................................... I1nterest.s of the Amicus Curiae . . . . . . . . . . . . . . . . . . ...Statement of th.e Case ................................ 2Statement of the Relevant Facts ....................... 4Summary of the Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111. PlainLiffs had no l e g a l authority to foreclbse

because they were n o t the original mortgagees,were not authorized by the power of sale, andbecause they lacked valid assignments of theIbanez and LaRace mortgages .................... 11A. Plaintiffs are not the mortgagees of theIbanez or LaHace loans .................... 13l3. Neither pl.aintiff was authorized by the

power o f sale in the respective mortgages . 16C. The assorted securi,tization ocuments do not

establish or comprise valid assignments . . . 1711. Not o n l y did plaintiffs lack legal authority to

foreclose, but the foreclosures are invalidbecause the notices published prior toforeclosure are fataI3.y .deficient . . . . . . . . . . . . . 20A. G. 1,. c. 244, 5 14 requires that the noti.ce

identify the present holder of themortgage .................................... 1

B. Plaintiffs false identification o fthemselves as the present holders in their

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foreclosure n o t i c e s renders the noticesf a ' t a l l y deficient: . . . . . . . . . . . . . . . . . . . . . . . . . 23I11 . Plaintiffs' argument that th ey held th e mortga gesnotwithstanding the lac k of valid. writtenassignments t is of the date of. he foreclosures i s

unsupported by law .............................. 24IV There are no grounds on which to limit the LandCourt's decision t o f u t u r e cases . . . . . . . . . . . . . . . 2 7Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

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Table of AuthoritiesCaseaAtJ.a*ltir. Sav. Bank v. Ietropolitan.. . Bank &'Trust,9 Mass. App. Ct. 286 (198.0) ........................ 14BottomLy v. Kabachnick, 13 Mass. App. Ct. 480(1982) .................................... 12, 22, 21 , 28Commonwealth v. Adams, 416 Mass. 558 (1993) . . . . . . . . .2-XCommonwealth v. Mass. C R I N C , 392 Mass. 79 (1984) . . . . . 1Cousbelus v. Alexander, 315 M.ass 729, 730 (1944) . . . 15

I. . Flavin v. Morrissey, 327 Mass. 217 ( 1 9 5 1 . ) . . . . . . . . . . . 1.6

Hanna v. 'Town o f Fram&ham, 60 Mass. App. C L . 420(2004) ............................................. 14Linsky v . Exchange Trust Co., 260 Mass. 1 5(1927) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 , 1,5Lowell Gas Co. v. Attorney General, 377 Mass. 37

.. ~ " ~,

(1.979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Macurda v . Fuller, 225 Mass. 341 (7 .916) . . . . . . . . . . . . . 6McGceevey v. Charlestown Fi ve Cents~....... Sav. Bank, 294Mass. 480 (1936) ............................ 12, 22, 24Milton.- Sav. Bank v . United States, 345 Mass. 302(1963) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Moore v. . Dick, 187 Mass. 207 (1905) ......... .2, 22, 24Murphy v. Charlestown Sav.- Bank, 380 Mass. 738(1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

-

Fer= v. Miller, 330 Mass. 2 6 1 (8.953) . . . . . . . . . . . . . . 4Roche V. Farnsworth, '106Mass. 509 (i871) . , 12, 22,. 4Seppala & Aho Constr. C n . v. Petersen, 373 Mass.316 (1377) . . . . . . . . . . . . . .. . . . . . . . . . . . . .. . . . . . . . . . . . . 2 5

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Spraque v. K j . m b a l 1 , 213 Mass. 300 (1913) . . . . . . . . . . . .15States Resources C o g . v . T h e A r c h i t c r A u r a l, .- Team,Inc., 4'33 F.3d 7 3 (1st Cic. 2 0 0 5 ) . . . . . . . . . . . . . . . ...21_I_Warden v. A d a m s , 35 Mass. 2 3 3 (1818) ............ 4, 15S a tu fesG. 1,.c. 183, 5 21 ............................ 5 , 12,1'1G. 1,. c. 240, 5 6 .................................... 2G . L . c. 244 , 5 1.4 .............................. passimG . L. c. 259 , 5 1.................................... 155 0 U . S . C . app . ' 5 3 ' 5 0 1 - 5 9 6 ............................. 7

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Issues Pr e s e n te d1. Whether a party has the legal authoriLy to

foreclose on a mortgaqe if it does not have a ninterest in the mortgage at the time of theforeclosure.

2. Whether a foreclosure n o k i c e t h a t [ails toidentify the present holder of a mortgaqe is l e g a l l ysuff ci.ent. even though the .identification f thepresent holder is required by G. L. c. 244, 5 14.

3. Whether the Land Court's interpretation oflongstanding Massachusetts statutory requirementsshou1.d be rejected or .limited solely becausesignificant costs to t h c plaknkiffs will result.

I n t e r e s t s of t h e Amicus Curiae

The AtLorney.Genera1 has 'broad common law andstatutory powers to represent the public interest."Commonwealth v. Mass.. CRINC, ,392 Mass.' 79, 8 8 (1984) .She has both a general statutory mandate and, in manyinstances, a specific statutory mandate, to protectthe public interest. -d. In additj-on, the AttorneyGeneral has a common law duty to represent the publicinterest and,to nforce public rights. Lowell Gas Co.v. Attorney General, 377 Mass. 37, 4 8 (1979).


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The Attorney General is a n elected officialcharged wi.th the duty of protecting the publicinterest. Commonwealth v. A d a m s , 416 Mass. 558, 5 6 6 -67Attorney General has a profound i n t e r e s t : in t h eenforcement of statutory requirements, and in theenforcement if consumer protection statutes inparticular. Moreover, as the Commonwealths attorney-in-chief, the Attorney General has an interest inensuring real property interests are conveyedefficiently and accurately in the Copmanwealth. .lhisis particularly so where Massachusett-s law permits thetransfer of real property without. judicial.involvement. In the absence of this supervision,

(1993) . A s the ch.ief law enforcement officer, the

strict compliance with the statutory requirements isthe only means to ensure the accuracy of public landrecords and the integrity of the syst.emfor t.ransferof real property.

Statement o f the CaseThe actions at issue here oriqinatcd in the Land

Court, where they were filed as independent actionsto remove a cloud on tj.tle u r s u a n t to G. I,. c . , 240 ,5 6. , [ A 1 7 - 2 5 ] . In those actions, plaintiffs sought a

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d e c l a r a t i o n. t h a t t he y 'h ad p ub li .s he d t h e r e q u i r e df o .r e c lo s u re n o t i c e s i.n a n a c c e p t a b l e p u b l i c a t i .o n . -d . 1

A f t , e r t h e t i m e Lo f i l e a r e s p o n s e e x p i r e d ,p 1 , a i n t i f f s m oved for e n t r y of d e f a u l t j u d g m e n t s .[ A 5 8 0 ] . The a c t i o n s w ere c o n s o l i d a t e d a nd t h e LandC o ur t re q u e s t e d b r i e f i n g on t h e i s s u e of .whether : t h e. p l . a i n t i f f s were t h e i e g a l h o l d e r s o f t h e m o rt ga ge ,s a n dw h eth er t h e n o t i c e s of s a l e c om p li ed . w i t h G . L .c. 2 4 4 , 5 1.4. L A 5 7 8 - 7 9 1 .

O n March 26, 2009, t h e Land Cour t i s sued aM em 0rand.m a nd O rd e r d er iy in y p l a i n t i f f s ' m o t i o n s f o re m t ry o f d e f a u l t j ud ym en t a n d found t h a t t h ef o re c l. o su r es w ere i n v a l i d b ec a us e t h e n o t i c e s f a i l e dt o . n a m e t h e mor t gage ho l de r a s of t h e d a t e o f s a l e asr e q u i r e d by ti. 1,.c. 2 4 4 , 5 14. [ A 5 7 4 - 9 3 ] . Judymenl:' t o t h a t e f f e c t WAS en t e red . [ A 5 9 4 - 9 5 ] . T h e r e a f t e r ,t h e p l a i n L i f f s f i l .e d m o ti on s t o v a c a t e t h e judgment .[ A 5 9 6 , 6371. The Land Court denj.ed t h e s e m o t i o n s a n d. ,r e a f f i r m e d i t s p r i o r j ud qm en t. [ A 1 1 3 6 ] .

The p r o p e r t i e s s e c u r i n g . t h e I b a n ez a n d LaR acem o rtg ag es a r e l o c a t e d i n S p r i n g f i e l d , M a s s a c h u s e t t s .The p l a i n t i f f s f i l e d t h e i r n o t i c e s o f i n t e n t tof o r e c l o s e i n t h e Boston Glob e, which t h e :l,a'nd Co urtfound was "a newspaper of g e n e ra l c i r c u l a t i o n " i n, S p r i n g f i e l d . . : t ' h i s . i s s u e i s n o t r a i s e d by an y p a r t y ona p p e a l . [ A 5 7 7 - 5 7 9 1


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On October 30, 2009, plaintiffs filed notices ofappeal from t h e Land Court's orders and judgmentsagainst them. [A1163-661.

On March 22, 2010, the Supreme Judicial Courtgranted direct appellate review..

Statement of the Relevant F a c t sThe relevant facts were succinctly s e t forth in

th e 'Land Cour t ' s Memorandum and Order on P l a i n t i f f s 'Motions to Vacate Judgment. [A1136-1162]

The facts concerniny Lhe Ibanez and LaRacemortgages are substantially similar. Both involvedadjustable-rate, subprime loans for the purchase ofresidential property in Springfield. [ A l l 4 ' 1 1 . Inboth, t h e borrower signed a promissory note arid gave a

mortgage to a lender, whi.ch was immediately recorded.-Id. Rose Mortgage was the original lender far the'Ibanezmor t gage and Option One Mort-gage Corporationwas the original lender for the LaRace mortgage. Id.

Rose endorsed the.Ibanez note and properlyassigned the mortgage t o Option One. -d. Option Onethen.executed an endorsement of both promissory notesin blank, makiny each "payable .tobearer" and

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n e g o t i a te d by t r a n s f e r a lo n e u n t i l s p e c i a l l y .e n d o r s e d . -d . , c i t i n g G . L . c . 106, 5 3 - 2 0 5 ( b ) .

I n b o t h case s , Opt i on One aJ.so e x e c u t e d a n .a s s i g n m e n t of h e m o r t g a y c i n b l a n k (i.c.,... w i t h o u t as p e c i f i e d a s s i g n e e ) . - _ Id . T h e s e blank mortgagea s s i g n m e n t s w e r e n e v e r r e c o r d e d a n d were n o t l c g a l l yr e c o r d a b l e because t h ey f a i l e d to i d e n t i f y t hoa s s i g n e e . S e e G . Id . c. 183 , 5 6C ( a s s i g n m e n t m u s ti d e n t i f y t h e a s s i g n e e i f it is t o be r e c o r d e d ) .S e c u r i t i z a t i o n.. o f t h e J b a n e z Mortgage, . .

A f t e r Opt i on One e nd or se d t h e n o t e s i n b l a n k , i ts o l d t h e m o r t g a g e s . [A1118]. 0 p t i . m O n c s o l d t h e

. I b an ez mor t gage t o Lekman Bro t he . r s . -d . LehmanB r o t h e r s t h e n s o l d t h e m o rt ga ge , t o g e t h e r w i t h

hundreds of o t h c r loans, t o S t r uc t u re d A s s e tS e c u r i t j , e s C o r po r at j. o n (SASC) -d . SASC t h e n s o l dt h e s e l o a n s t o t.he S t r u c t u r e d A s s e t Secur i . t i e sCorpora t j .on Mor tgage Loan T r u s t 2006 - 2 , of whichp l a i n t i f f U . S . . Bank N a t i o n a l A s s o c i a t i o n (U.S. Bank)was t h e t . r u s t e e . I d ..-

A l l of t h e s u p p o r t i n g d oc u me nt s co n c e r n i n g t h eIbanez mor t gage were p l a c e d i . n t o a , c o l l a t e r a l f i l e and presumably were t r a n s f e r r e d b etw een t h e e n t i t i e s

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I . i s t e d a b o v e as c a c h t r a n s a c t i o n was c om p l et ed :[ A 1 1 4 Y l . T h i s c o l l a t e r a l f i l e c o n ta in ed t h e o r i g i n a l

p r o m i s s o r y n o t e , t h e Hose M o rt g ag e e nd o rs e m en t o f t h ep r o m i s s o r y n o t e t o O p ti on One, O p t i o n One's b l a n kendorscmcnt a f t h e p r o m i s s o r y . n o t e , t h e m or tg ag ei s s u e d Lo Rose Mor tgage , Lnc . , t h e a s s i gnmen t of t h emorLgage from Rose t o Opt ion One , and Op't ion O n e ' sb l a n k mortgage a s s i g n m e n t .S e c u r i t i z a t i o n o f t h e - aRace Mortgage

...d.

Option One sold th e LaRace mortgage t o B a n k of. A m e r i c a . -'d . Bank oFAmerica s o l d t h e LaKacem o r tg a g e t o g e t h e r w i t h h u n dr ed s o f o t h e r - l o a n s toA s s e t B a c k e d F u n d i n g C o r p o r a t i o n ( "ABFC") . CA1149-I l . S O ] . A B F C Lhcn s o l d t h o se l o a n s t o t h e A B F C 2005-OI''l'1 T r u s t , of w h i c h p l a l , n t i f f W e l l s Fargo B a n k , N . A ; ,( 'W ells Fargo") was t h e t r u s t e e . [A1150].

J u s t as w i t h . t h c I ha ne z m o rt ga ge , t h e e s s e n t i a ll o a n d oc um e nt s, i n c l u d i n g t h e LaRaces ' mor tgage ando r i g i n a l promissory n o t e , O p t i o n O n e ' s . b l a n kendorsement of t h e p r o m i s s o r y n o t e , a nd O p t i on O ne 'sendorsement of t h e mortgage i n b l a n k , w e r e c o n t a i n e di n a " c o l l a t e r a l f i l e " t h a t was p r es u m ab l y p a s s e d f ro mp a r t y t o p a r t y a s t h e l o a ns w e r e s o l d . I d .

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The Forec l osu re s .A f t e r b o t h t..? I b a n e z and LaRace ian s became

d e l i n q u e n t , t h e f o r e c l o s u r e p r o c e s s be ga n. [ A 1 1 5 3 ] .The l o a n s were r e f e r r e d t o c o un s el w i th i n s t r u c t i o n st o b r i n g f o r e c l o s u r e a c t i o n s a g a i n s t t h e d e fe n da n ts .[A1153-541. T h e r e a f t e r , p l a i n t i f f s f i l e dS e r v i c e m e b e r s C i v i l R e l i e f A c t c o m p l a i n t s a g a i n s t M r .Ihancz and t h e LaRaces . CA1154-551 .

The Ib a ne z c o m p l a in t i d e n t i f i e d U . S . Rank as t h eowner (or assignee). a n d h o l d e r o f a m o r t g a g e w i t h as t a t u t o r y pow er o f s a l e . [ A1 15 4] . Thc N o t i c e o fMor t gagee s Sa l e of R e a l E s t a t e was p u b l i s h e d . x.T h is N ot ic e s t a t e d t h a t U.S. Bank was t h e p r e s e n tholder : o f t h e Ibanez mor t gage . -d. T h e I b a n e zF o r e c l o s u r e s a l e was c o n d u c t e d on J u l y 5., 2007 . i n t h ename o f U . . S . Rank. On Septcmher 2 , 2008 , some

. The Servicemembers C i v i l R e l i e f A c t ,o f 2003 , f o r m e r l yknown a s t h e S o l d i e r s a nd Saj .Z ors C i v i l R e l i e f A c tof 1.940, i s a f e d e r a l law t h a t p r ov i de s p r o t e c t i o n sf o r m i l i t a r y members w h i l e t h e y a r e on a c t i v e d ut y .50 U . S . C . app. 501-596. P u r s u a n t t o t h i s A c t , af o r e c l o s in g p a r t y m u s t o b t a in a j u d i c i a l r u l i n g t h a tt h e b o r r o w e r i s n o t o n a c t i v e m i l i t a r y s e r v i c e p r i o rt o f o r ec l o su r e . G . Because Massachusetts.is a non-j u d i c i a l f o re c lo s u r e j u r i s d i c t i o n , t h i s i s t h e extentof court in vo lv em e nt i n a t y p i c a l f o r e c l o s u r e i n t h eCommonwealth.


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f o u r t e e n. m o n t hs a f t e r t h e ' f o r e c l o s u r e s a l e , Ameci.canHome Mortynge Servicing, Inc. ( t h c p u r p o r t e d s i i cc e ss o ri n i n t e r e s t t o 0 ptj .o n One) a s s i g n e d t h e I b a n e zmor t gage t o U . S . Bank. [ A 1 , 1 5 5 1 .

The L aR ace c o m p l .a in t i d e n t i f i e d W e l l s Fargo a st h e "owner (or a s s i . g n e e ) and h o l d e r ' o f a mortgage w i t ha s t a t u t o r y pow er o f salc." 1.d. The Not ice ofM o r t g a g e e r s S a l e of R e a l E s t a t e was p u b li sh e d . ' I d .The No t i ce s t a t e d t h a t W el ls Fargo was t h e " p r e s e n th o l d e r " o f t h e m o r tg a ge . -d'. 'The LaRace f o r e c l o s u r esale t o o k p l a c e o n J u l y 5, 2 0 0 7 in t h e name o f WeJ.1.sk'arqo. 011 September , 2 , 2 0 0 8 , some f o u r t e e n m o n t h sa f t e r t h c f o r e c l o s u r e s a l e , A m e ri ca n Home M o rt ga geS e r v i c i n g , I n c . ( t h e p u r p o r t c d s u c c e s s o r i .n i n t e r e s t :t u Opt i on One) a s s i y nc d t h e LaRace mor t gage t o 'WellsF a r g o . ' r A 1 1 . 5 6 1 .

Summary of the ArgumentThe Land Court was corrccl . t o i n v a l- i da t e t h e

f o r e c l o s u r e s . n two d i s t i n c t g r o u n d s .F i r s t , t h e p l a i n t i f f s 1.acked t h e l e g a l a u t h o r i t y

t o c on du ct t h e f o r e c l o s u r e s be c au s e t h e y w ere n o tamong t h e p a r t i e s a u th o r i z e d t o do s o under e i t h e r t h es t a t u t o r y power of s a l e or under G : L . c . 2 4 4 , 1 4 .

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Second, even if the pl.ai.ntiffs ad had the l e g a lauthority to foreclose (which they did not) theforeclosures would still have been i.nva1i.d because then0tice.s issued by the plaintiffs failed to name thepresent holder of the mortgage as 'required under: G . Ti.c . 244, 5 14.

. ,!Co foreclose on a mortgage securing property in

the Commonwealth, one must be the holder of themortgage. To be the holder of the mortgage, one mustbe the original mortgagee or bc the assignee under avalid assignment of the mortgage. It is' otsufficient to possess the mortgagor' s promissory note.The Land Court correctly held that the plaintiffs,U.S. Bank and Wells Fargo were not holders. f the

l b a n e z and LaRace mortgages at the time o f foreclosurebecause they were not assignees of valid assi9nment.sof the mortgages. Without valid assignments, thepl.ai.ntiffs lacked the legal authority to foreclose themortgages'. T h i s , without more, is sufficient groundson which to invalidate the foreclosures and the LandCourt was correct to do so.

. ..

In addition, the foreclosures were properlyinvalidated for the plaintiffs' failure to comply-with

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f o r them to bear the cost of failing to enslire that,such practices conformed to Massachusetts law.

ArgumentP l a i n t i f f s had no legal a u t h o r i t y t o f o r e c l o s ebecause t h e y were n o t t h e or igi na l mortgagees ,were not authorized by the power of sale, and

. . because they lacked v a l i d ass.ignrnents of theIbanez and LaRace mortgages.It j.s axiomatic that a party cannot foreclose a

I.

.mortgage without t h e legal authority to do so. Tohave lcyal authority to foreclose, one must beauthorized by the power of sale set forth in themortgage and must be liskcd among the authorizedp e r s o n s in G . L. c. 244, 5 3.4. In this case, only themortgagee or its valid. assignee has that authority.As the Land Court found, neither U.S. Bank nor Wells

' Fa rgo was the mortyigcc of the respective J-oans at thetime they sought to f'orecloseas the mortyagees, norwas either the assignee under a valid assignment. ofthe mortgage at the time of foreclosure. Accordingly,neither U.S. Bank nor Wells Fargo had the legalauthority to foreclose the Ibanez and LaRacemortgages.

Chapter 2 4 4 , .'3 14 identifies a narrow group ofpersons who may foreclose. That group includes the


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mor t gagee , a p e r s o n . a u t h o r i z e d by t h e p ower o f sale,a n a t t o r n e y d u l y a u t h o r i z e d b y a w r i t i n g u n d er s e d ,t h e m o r ty a ge c s l e g a l g u a r d i a n ox c o n s e r v a t o r , o r ap e r so n a c t i n g i n t h e n a m e of s u ch m o rt g ag e e o r p e r s o n .S e e G . L . c . 2 4 4 , 5 14.

~

The s t a t u t o r y power of s a l e i n c or p o ra t e d byre fe rence i n t o t h e l h an ez a n d LaRace mor t gages i sc o d i fj .e d a t G . L . c . 183 , 2 1 , and s t a t e s t h a t o n ly t h e m o rt ga ge e o r h i s e x e c ut o r s , a d m i n i s t r a t o r s ,s u c c e s s o r s o r a s s i g n s may e x e r c i s e t h e power of s a l e .G.. I,. C. 183, 2 1 .

T he se a r e n o t mere g u i d e l i n e s or s u g y c s t c dp r a c t i c e s . S t r i c t c o m p li an c e w i t h t h e r e q u i r e m e n t s ofb o t h t h e p ow er of s a l e and G . L. c . 244, 5 1 4 i s

r e q u i r e d . M o o r e v . ~D i c k , 1 8 7 Mass. 207 , 213.-23 .2(1905); Rot t oml y v . Kabachn ick , 13 Mass. App. C t . . 4 8 0 ,4 0 4 ( 1 9 8 2 ) . See a1.so McGreevey v. Ck ar lcs tow n Fi veCenLs, Sav. B a n k , 294 Mass. 480, 481 (1936)( f o r e c l o s u r e s a l e i n v a l i d w he re power o f . s a l e r e q u i r e da d v e r t i s e m e n t i n S u f f o l k C o un ty an d s a l e i n B o s to n,b u t m o r tg ag ee a d v e r t i s e d and s o l d i n Medford, where.p r o p e r t y was l o c a t e d ) ; 11oche v. Farnswor t h , 1 0 6 Mass.509, 513 (1871).

-~

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Thus , t o have l e g a l a u t h o r i t y to f o r e c l o s e ,p l a i n t i f f s m ust e i t h e r b e t h e m o rtgayces of t h er e s p e c t i v e l o a ns o r h o l d v a l i d a s s ig n m e nt s o f t h el o a n s .p e r s o n s a u t h o r i z e d by t h e s t a t u t o r y power of s a l e a t ,t h e t im e of t h e f o r e c l o s u r e s , and be ca us e t h e y weren o t v a l i d , a s s i g n c e s of t h e m o r tg a ge s , t h e y l a c k e d t h e

B ecause p l a i n t i f f s were n e i t h e r m or tg a ge e s no r

l e g a l a u t h o r i t y t o f o r e c l o s e , and t h e f o r ec l o su r e s a r ev o i d a s a m a t t e r of law. 3

A . Plaintiffs a r e not the mortgagees of . t h e . .Ibanez or LaRace loans.

T o b e a mortgagee , one mus t e i . th er be t h eo r i g i n a l l e n d e r o r b e t h e a s s i g n e e u n dc r a v a l i da s s i g n m e n t o f t h e m o r t g a g e . A p a r t y who i s n o t t h eo r i g i n a l l e n d e r can o n l y o b t a i n t h e lega l . r i g h t s of am0r tqage . e t h rough Lhe v a l i d a s s i qnmen t o f t h em o r t g a g e . N e i t h e r U.$. Bank 1101' Wells Fargo was th eo r i g i n a l l e n d e r of t h o r e s p e c t i v e l o a n s . N o r w a s

P l a i n t i f f s do n o t e ven a rg u e t h a t t h e y a r e" s u c c e s s o r s " o r ' h a t t h ey " a c t ' i n t h e name o f " t h em o rt ga ge e, a nd r i g h t f u l l y s o . N e i t h e r U.S. B a n k n o rW e l l s ' F a r q o h ad , a t t h e t i m e o f f o r e c l o s u r e , a c q u i r e dt h e a s s e t s o r l i a b i l i t i e s of t h e h o ld e r of t h emor t gages . Nor c o u l d U.S. Bank o r Wells Fargop l a u s i b l y c on te nd t h a t t h e y were a c t i n g " i n . t h e nameo f" t h e h o l d e r of t h e m o r t g a g e s , p a r t i . c u l a r l y w h e r et h e f o r e c l o s u re n o .t ic es i d e n t i f y t h e p l a i n t i f f s acLirigi n t h e i r own c a p a c i t y a s t h e f o r e c l os i n g p a r t i e s .

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e i , t h e r p l a i n t i f f an . a s s i g n e e u n d e r a v a l i d a ss ig nm e ntb e c a u s e , a t t h e L i m e of t h e f o r e c l o s u re s , n e i t h e r U.S.Bank nor Wells Facgo h e l d a w r i t t e n s t a t e m e n tc o n v e yi n g t h e m o r tg a ge t h a t s a t i s f i e d t h e S t a t u ' t e o fFrauds o r e ve n t h e m o st b a s i c of c o n t r a c t u a lr e q u i r e m e n t s . S e e L i n s k y v ; _.xch. qe T r u s t C o . , 26 0Mass. 1 5 ( 1 9 2 7 ) (agreement t o g i v e o r a s s i g n a m o rt g aq ei s an agreement t o convey an i n t e r e s t i n l a n d and mustb e w r i t t e n ) ; Warden."" v. Adams, 15 Mass. 233 ( 1 8 1 8 )( same) .

111 M a s s a c h u s e t t s , "[a] mortyage of r e a l e s t a t e i sa conveyance of t h e t i t l e o r of some i n t e r e s t ' t he r e. i. nd c f e a s i b l e upon t h e paym ent 0.f money o r t h epe r fo rmance of some o.Lhcr c o n d i t io n ." Murphy v.Cha r l e s t own Sav . ,.B a n k. .,- 380 Mass. 7.30, 7 4 7 ( 1 9 8 0 ) . I na m octq ag e t r a n s a c t i o n , t h e m o rt ga go r t r a n s f e r s alll e y 2 1 t i t l e t o t h e m o rt ga ge e, r c L a i n i n g o n l y t h e" e q u i t y of r e d e m p t io n , " u n t i l t h e m o rtg ag e is a t i s f i e d 'o r f o r e c l o s e d . . ~S e e P e r r y v. M i l l e r , 330Mass. 2 6 1 ( 1 9 5 3 ) ; Hanna v. Town o f Framingham,- 6'0Mass. App. C t . 4 2 0 (20011); A t l a n t i c-- Sav. Bank v.M e t r o p o l i t a n B a n k_..ll.- & T r u s t , 9 Mass. App. C t . 286(1980). A c c o r d i n g l y , t h e a s s i g n m e n t o f a mor t gage is a

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conveyance of a.lega1 estate in the mortgagedpremises. It j.s the transfer of an j.nEere:st n realproperty and the Statute o f Frauds requires that anyassignment of the mortgage be in writing. Warden v.Adams, 15 Mass. 233 (1018).

To convey real p r o p e r t y one must have a writtenagreement that contains the fundamental elements of acontract and complies with the Statute of Frauds. ~See.G. L. c. '259,5.1; i n s k y v. Exchange,- - Trust Co., 260Mass. 15'(%327)(agreement to give or assign a mortynyeis an agreement to convey a n interest in larid and must.be wr.it'c.cn); prague v. Kimball, 213 Mass. 380 (1913):The written instrument "must contain the terms o f thecontract agreed upon - t h e parties, the locus (if ani-nterest in real estate is dealt with), in somecircumstances the price, and it must be signed by t-heparty to be charged or by someone authorized tu s i i g r ion his behalf." Cousbelus v. Alexander, 315 Mass 729,./30 (1944) (internal quotations. mitted). Anassignment that does not contain these essentialcomponents is invalid. ISee id.' T hus , to be theholder of a valid assignment of a mortgage, one musthold a written agreement that includes, at: a minimum,

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t h e n a m e s o f a l l p a r t i e s t o t h e c o n t -c a c t a n d a ni d e n t i f i c a t i o n of t h e s u b j e c t p r o p e r ty , and i s s i g n e db y t h e p a r t y t o be cha rged . A t no t i m e p r i o r t o t h ef o r e c l o s u r e s d i d p l a i n t i f f s possess such a n . .a s s i g n m e n t .

. .

Th e r e c o r d . r e v e a l s t h a t n c j t h e r U:S: Bank n o rWells Fargo had r ece i ved a f u l l y - e x e c u t e d a s s i g n m e n tp r i o r t o t h e f o r ec l o su r e s a l e s . A t most , e a c hp o s s e s s e d t h e a s s i g n m e n t s executed i. n blank b y Opt i onOne p r i o r t o t h e s e c u r i t < . z a t i o n o f t h e l o a n s . N e i t h e rof t h e s e a s s i g n m e n t s i d e n t i . . f i e d a n a s s i g n e e .

Indeed , n e i t h e r p1. ai .n ti .f f i s i d e n t i f i c d on t h e sep u r p o r t e d a s s i g n m e n t s . Nowhere on t he se documen t sdo t h e w o r d s U.S. Bank o r Wells Fargo appea r .

Unde r Massachuse t t s l aw , s u ch a s s i g n m e n t s i n b l a n k t r a n s f e r n o t hi ng t o no o ne . See t.l.avin v . Mor r i s s ey ,327 Mass. 2 1 7 , . 2 1 9 (1951.) ; Macurd2 v . F u l l c r ,... .... . 225Mass. 3 4 1 , 344-45 (1916). Thus, a t t h e t i m e t h e yp u r p o r t e d t o f o r e c l o s e , n e i t h e r p1 .a in ti .f f was t h emor t gagee of t h e r e s p e c t i , v e l o a n s .

B. Neither p l a i n t i f f was authorized by t h epower of sale in the respective mortgages.

Ne i t he r . .U . S . Bank no r Wells Eacgo i.s among thoscp a r t i e s a u th o r i z e d t o e x e r c i s e t h e s t a t u t o r y power o f

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sale incorporated into the Ibanez and' aRaccmortgages. The only persons w h o may exercjse thepower of s a ' l e are "the mortgagee or his executors,administrators, successors OK assigns." G.. . c. 103,5 21. Because neither plaintiff is a mortgayee n o rwas either an assignee under a valid assignment at: thetime they foreclosed and sold t h e properties, eachl a c k e d authori.ty to exerci-se he power of sale.

C. The assor ted securitization documents do notestablish o x comprise valid assignments.

Plaintiffs contend that various securitizationdocuments constructj.ve1.y assigned to them the I ba ne zand LaRace mortgages. Specifically, the plaintiffscontend that ' t he Ibamz mortgaqe was assj-gnedto U.S.Hank by way of a Trust Ayreemcnt tha.tr is not part ofthe record, but is purportedly evidenced by a PrivatePlacement Mmnurandum. They contend that Wells Fargoreceived t h e LaKace mortgage via a ' P u r c h a s e and Sa1.eAgreement. In each case, plaintiffs' argument.is.without merit.

1. The LaHace Securitization Documents.-

As the Land Court found, the LaRaces gave amortgage to Option One when the loan was initiallymade. Thereafter, Option One executed an assignment

3. I


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. Indeed, t h e r e a r e o n l y two v a l i d a s s ig n m e nt s o f t h eIbar l ez .mor tgage j , n t h e r e c o r d : Rose Mor tgage 'sa s s i g n m e n t t o O p t i o n One and American Home MortgagesS e r v i c i n q , Inc. s p o s t - f o r e c l o s u r e a s s i g n m e n t t o U. S .

' .

Bank.U . S . Bank cl.a.ims i t becamc t h e h o l d er of ' t h e

I b a n cz m o r t g aj e v i a a n u n d i s c l o s e d ' I ' r u s t Agreement1J.S. Hank sta.Les t h a t t . h i . s document . : which was n e v e rp roduced and i s n o t i.n t h e r e c o r d ... c o n t a i n s l a n g u a g es i m i l a r t o t h e j .anguage i n t h e LaRace I?oolj .ng andS e r v i c i n g A gree me nt. P l a i n t i f f s ' Hr. a t 1 9 .

1I.S. B a n k ' s rel i .ance on t h i s document i smi sp l aced . Even i F t h e Trus t Agreement were i n t h er e c o r d a n d e v e n i.f i t co r i l a i ned l anguage i .denti.cal t ot h a t i n t h e LaRace Pool ing and Se rv ic in g Ayreemcnt, itwou1,d s t i l l ,bc i n e r f e c t i v e t o a s s i g n t h c IbanezInor'tyage hecause t t i c r c i s no evj.r lence t h a t t h e p a r t yw h o s e i . n t e r e s t i n t h e m o rt ga ge i t purports t o t r a n s f e rhad a n y i n t e r e s t j n k h a t murlyage. .

The T r u s t Aqreenicnt a1legedl.y p u r p or t s t ot r a n s f e r t h e i n t e r e s t s of S t ru c tu r ed A s s e t S e c u r i t i e sC o r p o r a t i o n ("SASC") t o U.S. Bank a s t r u s t e e o f t h eS L r u c t u r e d A s s e t Securi t ies Corpora t i on Mor t gage Loan


25/35

T r u s t 2006 - 2 . 'owned by Option One, much ' l e s s t h e I b a n e z m o r t g a g e .T h e r e i s no e v i d e n c e of any ass i .gnmcnt f rom Opt ion Onet o SASC. Thus, even i f : t h e Trus t Agreemen t were

I t does n o t p u r p o r t t o ' a s s i g n a n y th in g

e f f e c t i v e t o a s s i g n ev er y i n t e r e s t S A X had i n t h eIba r iez l o a n i t wou1.d s t i l l be i n e f f e c t i v e b ec au se t h eI b a n e z . oa n was nev er SASC'r; t o t r a n s f e r . 4

Thus, t h e L and C o u r t c o r r e c t1 . y fo un d t h a t t h ep l a i n t i f f s foreclosed on M r . Ibanez and t h e LaRacesw i t h o u t l e g a l a u L h o r i t y u n d e r e i t h e r G . L . c . 2 4 4 ,5 1 4 o r t h e s t a t u t o r y power o f s a l e i n c or p o ra t e d byr e f e r e n c e i n t o t h e m o r tg a ge s .11. Not only did plaintiffs lack l e g a l authority to

foreclose, b u t the foreclosures are invalidbecause t h e notices published prior toforeclosure are fatally deficient.'Even if t h e p l a i n t i f f s had l e g a l a u t h o r i t y t o

e x e r c i s e t h c s L a t u t o ry p n w e r of sale ( w h i c h t h e y d i dn o t ) , th e f o r e c l o s u r e s w o u l d n o n . e t h e l e s s b e . i n v a l i db c c a u s e % h e n o t i c c s - of s a l e ' i s s u e d f a i l e d t o i d e n t i - f y

.."_II n dc c d, t h e v e r y f a c t t h a t b o t h p l a i n t i f f s s ou gh tcomple ted as . s ignments f rom O p ti on One a f t e r t h ef o r c c l o s u r e s occurred c o n fi rm s t h a t t h e y t he m s el ve sb e l i e v e d t h a t t h e y l a ck ed v a l i d a ss ig nm e nt s p r i o r t ot h a t t i m e .

4

2 0

. . . -.


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t h e " p r e s e n t h o l d e r" of t h e Ibanez and I jaRacemor t gages .

A . G . L . c . 2 4 4 , 14 requires t h a t t h e n o t i c ei d e n t i f y th e "pr esent holder"' o f t h emortgage.

C h a p t e r 2 4 4 , s e c t i o n 1 4 " p r e s c r i b e s t h e p r oc e du r ei n t h e f o r e c l o s u r e o f a mortgage of r e a l e s t a t e undera p ow er of s a l e , an d s e t s f o r t h t h e fozm o f t h e n o t i c eand t h e r e q u i r e m e n t s f o r i t s p u b l i c a t i o n . " M i l t o nSav. Hank v . U n i t e d S t a t e s , 3 4 5 Mass. 302, 306-30 '7(1963). S e e a l s o S t a t e s Res rccs Corp. v . ___h c

A r c h i t e c t u r a l, ....-I.-" T e a m , I n c . , 433 F.3d 73 , 80-83 ( 1 s t C i r .200 5 ( m or tg a ge s t a t u t e s s e t minimum s t a n d a r d ) .

C h a p t e r 2 4 4 , s e c t i o n 14 s p e c i f i c s , - the

~ ~- "_

r equ remcnts f o r t h c n o t i c e t o be i s su e d i nc o n j u n c t i o n w i t h a fo r ec l . o su re . Sec t i - on 3.4 j . 'ncludest h e t e x t o f a form n o t i c e . ' T h a t fo rm s p e c i f i c a l l ystates that : thc "p re s en t ho l der ' ' o f t h e m o r t g a g e s h a l lb e i d e n t i f i e d and in de ed , t h a t the p r e s e n t holder:s h a l l s i g n t h e n o t i c e . G . L . c . 2 .44 , 5 14. T h c .s t a t u L e s t a t e s t h a t t h i s form , w hich i s e x p l i c i t l yp a r t o f t h e t e x t o f. S e c t i o n 1 4 , " s h a l l be a s u f f i c i e n tN o t i c e o f t h e sale." Id . ( emphas i s added) -

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This Court has long required that anyonepurporting to act unde r a statutory power of salemust strictly comply with the terms of G. L.c . 2 4 4 , 5 14 and the power of sale:

It is familiar law that one who sellsunder a power must follow strictly itsterms. If he fails to do so there isno valid execution o f the power and th6sale is wholly void.

Moore, ' 187 Mass. at 211-212 (citations omit.ted). Seealso McGreevey, 294 Mass. at 481; Roche,.106 Mass. at513; Bottomly, 1 3 ass. ~ p p . t. at 484 ("The mannerin which the not'icc of the proposed sale shall begiven i s . o n e of the important terms of the power and astricl: compliance with it j.s essential, to f h e validexercise of the power. )

Thus, even though Section 14 permits the u se ofvari.ati.ons n the statutory farm, any such variationmust include, at a minimum, the criteria specj-fied inthe statutory form, including a specific'identification of the present holder of the mortgageat the t h e of the notice. Bottomly,. . I 13 Mass. A p p .Ct. at 483-484. Tho failure to identify the presentholder of the mortgage in the notice will render aforec.losuse voi,d as matter of law. Id.

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B . P l a i n t i f f s ' f a l s e i d e n t i f i c a t i o n o fthemselves as the "present h o l d e r s " i n t h e i rf o r e c l o s u r e n o t i c e s renders t h e n o t i c e sfatally d e f i c i e n t .

B ecause t h e p l a i n t i f f s were n o t t h e p r e s e n th o l d e r s of t h e m o r tg a g es a t t h e t im e t h e y f o r e c l o s e don t h e Ibanez and LaRacc l o a n s , t h e n o t i c e s weref a t a l l y d e f i c i e n t and t h e f o r e c l o s u r es v o i d a s am a t t e r o f l a w .

1 . L i s u n di sp u te d t h a t t h e f o r e c l o s u r e n o t i c e s f o rt h e Ibanez and LaRace f o r e c l ~ o s u r e swere p u b l i s h e d in .t he names of.U.3. R a n k ' a nd . W e l ls F ar go , r e s p e c t i v e l y .[ A 4 8 4 , 4 8 6 1 . M oreover, t h e r e c o rd e s t a b l i s h e s t h a tn e i t h e r had any i n t e r e s t i n t h e m o r tg ag e b e i n gf o r e c l o s e d. a t t h e t i m e of t h e f o r e c l o s u r e . [A18, A231

I t i.s also u n di sp u te d t h a t n e i t he r : p l a i n t i f f was. .

Lhe o r i g i n a l m o rtg ag ee o f t h e r e s p e c t i v e l o a n s . -d .T hu s, t o b e h o l d e r s o f t h e m ortg ag es , t h e p l a i n t i f f sneed t o e s t a b l i s h t h a t t h e y r e c e i v e d v a l i d a s s ig n m e nt sfrom a v a l i d h o ld e r of t h e mortgage: A t t h e t h e o ft h e f o r ec l o su r e s , t h e p l a i n t i f f s had n o t r e c e i v e d any

such a s si gn m e n t ( s e e S e c t i o n I , supra.). I n d e e d , t h ep l a i n t i f f s o n ly r e ce i v e d co m ple te d a s si gn m e n ts s e v e r a lm o n t h s a f t e r t h e f o r e c l o s u re s a l e s took p l a c e . a.A cc or din giy , p l a i n t i f f s were n o t t h e p r e s e n t h o l d e r s

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of the mortgages and thus their foreclosure noticeswere fatally deficient rendering the foreclosures voidas a matter o law.111. Plaintiffs argument that they held t h e mortgages

notwithstanding the lack of valid, writtenassignments as of the date of the foreclosures isunsupported by law.Plaintiffs contention they are the equitable

holders of thc mortgages and that they hold enough 0.fthe indicia of ownership to he considered mortgageesof the LaRace andIbxiez loans is riot onlyinsufficient to grant them the -legal authority to

, .

foreclose, but also insuff%cient to grant thempresent holder status.

This argument runs counter to the longstandingrequirement that: foreclosure under a statutory powerof sale must be in strict compliance with all aspectsof the statute. --oore, 187 Mass. at 211-21.2;--Bott*, 13 Mass. App. Ct. at 484. ~See also...McGreevey,. 294 Mass. at 481; .oche, 106 Mass. at 513.

The need for strict compliance is especially true

I.n Massachusetts where no judicial approval isrequired to foreclose. In the absence o f judicialforeclosure, strict compliance is the only means toensure that borrowers are not subject to fraudulent or

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i m pr op er f o r e c l o s u r e s . I n d e e d , ' a s t h e Land C o ur tc o r r e c t l y noted, s t r i c t compliarice w i t h t h e s t a t u t o r yr e q u i r e m e n t s f o r t h e e x e r c i s c o f a power of s a l e i st h e only way Lo e n su r e t h e p r o t e c t i o n s g iv en t ohomeowners an d borro wer s by t h e L e g i s l a t u re .

D i s t r e s s e d hom eow ners o f t e n face c h a l l e n g es i nt .he f o r e c l o s u r e p r o c e s s . In. c ' r t a i n c a s e s , t h e y mayl a c k t.he t e c h n i c a l , k no wle dg e a nd t h e f i n a n c i a lr e s o u r c e s t o c o n t e s t a w r o n g f u l . f o r e c l o s u r e o ro t h e rw i s e e n su r e t h a t t h e l e n d e r a d h e r es t o t h eo b l i g a t i o n t o s e rv e t h e i n t e r e s t s o f t h e mor t gagor i n

5good f a i t h . Thus, p l a i n t i f f s ' i m p l ic a t i o n t h a t t h eborrowers have wai .ved Chci r r igh t t o c h a l l e n g e t h el e g i t i m a c y o f t h e s a l e b ec au se t h e y had "amp1.eo p p o r t u n i t y t o c h a l l e n g e t h e f o r e c l o s u r e p r oc c ed i ng sp r i o r t o t h e s a l e s bu t f a i l e d t o do so" i sp a r t i c u l a r l y t r o u b l i n g when t h e p l a i n t i , ' f f s t he m se lv es

5 T h a t . a f o r e c 1 , o s in g p a r t y o w e s . s u c h a d u t y t o t h emor tgagor i s w e l l - e s t a b l i s h e d . See S e p p a l a & Aho~.onstr. C o . v . Pe t e r s en , 373 Mass. 3 1 6 , ' 320 ( 1 9 7 7 )("We h av e f r e q u & t l y s t a t e d t h a t t h e b a s i c r u l e of lawa p p l i c a b l e to . t h e f o r e c l o s u re of r e a l e s t a t e m o rtg ag esi s t h a t a mortgagee i n e x e r c i s i n g a pow er o f s a l e i n am o rt ga ge m us t a c t i n good f a i t h a n d must user ea so na b l e d i l i g e n c e t o p r o t e c t t h e i n t e r e s t of t h emor t gagor . " )

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have failed to comply with the statutory requirementsto foreclose. Plaintiffs' Br. at 44.

In addition, the Commonwealth i s well-served byan efficient. nd reliable system f o r the transfer ofinterests in real property. Even as plaintiffs claim

. .

that the efficiency o f the market warrants relaxingthe standards f o r title conveyance, the system theypropose will only inccea.se title disputes.plaintiifs' argument is correct that a valid,completed assignment is not required prior toforeclosure, and mere "indicia of ownership" is

If

,

sufficient to foreclose, confusion wil.1. a r i s e as towhether the foreclosing party had sufficient "indiciaof ownership'' td conduct the foreclosure.

Accordingly, maintaining the strict, bright-linenotice and.assignrnent requirements of G. L. c . 244,S: 14 is essential Lo ensure clear title and theintegrity of the conveyance.

In sum, the record in this case reflects howmortgage.lending changed in recent years and how theindustry failed to e n s u r e that its new business modelconformed to state law. Namely, instead of lenderswho held mortgages for the duration'of the loan or

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o n l y t o f u t u r e f o r e c l o s u r e s . T h i s a rg um en t j.s w i t h o u ta n y b a s i s i.n law and s h o u l d be r e j e c t e d .

N o t w it hs ta n di n g t h e " i n d u s t r y p r a c t i c e " ofs u b p ri m e l e n d e r s a n d o t h e r s who c r e a t e d m o rt ga g e-backed s e c u r i t i e s , t h e s t a t u t o r y r eq ui re me nt s a t . i s s u ei.n t h i s case a r c l o n g - s e t t l e d . The n o t i c er e q u i r e m e n t s o f G . L . c . 244, 5 1 4 have been i n p l a c e 'f u r more t h a n f i f t y y e a r s a n d w ere c on f ir m e d by t h eAppeals C o u r t i n . 1 9 0 2 . S e e B o tt o m ly , 1 3 Mass. App. a t4 8 4 . The Land C o u r t ' s r u l i r i y w a s . n o t a " j . u d i c i a l l y -r e n d e r e d c h a n g e t o an e s t a b l i s h e d p r o p e r t y law" a s t h ep l a i n t i f f s c la im . A p pe l l an ts ' B r . a t 49 . M O K e O V e I ,t h e r e i s n o t , nor has Lhere ever b ee n, a d o c t r i n e ' t h a ta n i - n t e r p r e t a t i o n of a l on g -e n ac te d s t a t u t e ca n b e1 . i . m i t e d t o f u t u r c c a se s .

' P l a i n t i f f s claim t h a t t h e y a r e " i n n o c e n t "p u r c h a s e r s be ca us e t h e y r e l i e d on REBA T i t l e S t a n d a r d58 a nd c o r r e sp o n d in g " i n d u s t r y p r a c t i c e " when, i nf a c t , t h e y . w e r e a w a r e o f b a t h t h e s t a t u t 0 r .yr eq u ir em e nt s and t h e d e f e c t s i n t h e i r own a s s i g n m e n t sand n o n e t h e l e s s pr oc ee de d t o f o r e c l o s e . A s banks i nt h e b u s i ne s s o f m a k i n g l o a n s s e c u r e d b y m o r t g a g e s ,s e l l i n g t h e s e s b cu re d l o a n s , an d a t times f o r e c l o s i n g

. .

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0 1 1 t h c s c mor t gages , plaintiffs were well aware of thestatutory requirements to transfer I.egal i-nterestsinmortgages and t o c o n d u c t f u r e c l o s u r e sales.Plaintiffs own c o n d u c t c o n f i r m s t h i s , f o r why e l s ewould t h e y s e e k a v a l i d , w r i t t e n as si gn m en t a f t e r t h ef o r e c l o s u r e i f no't to cure the defective assignmentsin blank they possessed beforehand?

Plaintiffs were aware t h a t t h e ass ignmen. t s wereI.egal1.y e f i c i e n t and were aware u f t h e r i s k s t h e ya c c e p t e d in loreclosing without first complying witht h e l e g a l requirements.auction notwithstanding these risks.

They bought 'the properties at

As the Land Court points out, t h e hanks were theonly b i d d e r s a t t h e f o r ec l o su r e s a l e s and t heyp u r c h a s e d thesc properties for less than the marketv a l u e s stated in their own appraisals, an advantagethey may have gained b ec au se o f t h e d e f e c t s in t h e i rn o t i c e s . [A S 19 - 8 0 ] T h i s was particularly dhmagiriy t oMr..Ibanez, a s U.S. Bank b i d f o r a n d p u r c h a s e d t h eL b a n e z p r o p e r t y fo r some $ 1 6 , 0 0 0 l c s s than Lhe amountof t h e o u t s t a n d i n g loan, leaving a significantdeficiency. Id. Thus, the p l . a i n t i f f s profited fromthe risks they took, at t h e e x p e n s e o f each o f t h e


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burrowers. Having reaped th e bene fits .of their casualattitude toward ensuring t , hey possessed validassignments of the mortgages, it is n o t u n j u s t thatplaintiffs should now bear the costs of their errors.

ConclusionFor the r e a s ons s t a t - ed above, the Commonwealth

respect fully urges the Court to affirm the decision ofthe Land Court.

Respectfully Submitted,COMMONWEALTH OF MASSACHUSETTSMARTHA COAKLEYATTORNEY GENERAL

Assistari t Attorney Ge n c r a lPublic Protecti.on and Advocacy .BureauConsumer Pro tectio n DivisionOnc Ashburton PlaceB o s t o n , MA 02108(617.) 727-2200 e x t . 2959j o h n . [email protected]. us

Dated:September 20, 201.0at Boston,. Massachusetts