Federal National Mortgage Association v. Marroquin
477 Mass. 82
| Mass. | 2017Background
- In 2005 Marroquin and co‑borrowers mortgaged their home; mortgage named MERS as nominee and was later assigned to Bank of America. After defaults, Countrywide (servicer) sent a notice of default on Oct. 17, 2008; foreclosure sale occurred in March 2012; Fannie Mae bought the property and brought summary process in June 2012 to evict defendants.
- Defendants asserted in their June 2012 answer that plaintiff lacked proper title and superior right to possession; they did not, at that time, expressly invoke the specific paragraph‑22 notice defect.
- Plaintiff moved for summary judgment in June 2015, arguing the notice complied with paragraph 22 of the mortgage; defendants filed a cross‑motion in Sept. 2015 arguing the notice failed to strictly comply and sought the benefit of this court’s decision in Pinti v. Emigrant Mortgage Co. (issued July 17, 2015).
- The Housing Court granted defendants’ cross‑motion, concluding (1) the Pinti rule should apply to trial‑court cases where the issue was timely and fairly raised before July 17, 2015, and (2) the notice of default did not strictly comply with paragraph 22, so the foreclosure sale was void.
- The SJC affirmed: it extended Pinti to trial‑court cases where the issue was timely and fairly raised before the Pinti decision, and it held the Oct. 2008 notice’s conditional phrasing (“may…have the right”) failed to strictly inform the borrower of the right to reinstate and the right to bring a court action as required by paragraph 22.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Should Pinti be applied to cases pending in the trial court that fairly raised the notice‑defect issue before July 17, 2015? | Pinti should have only prospective effect and not apply to trial‑court cases pending at the time. | Pinti should benefit similarly situated litigants who timely and fairly raised the issue before the opinion. | Pinti applies to trial‑court cases where the issue was timely and fairly raised before July 17, 2015. |
| 2) Did defendants timely and fairly raise the paragraph‑22 notice issue below? | Plaintiff argued defendants did not specifically plead the paragraph‑22 defect until after Pinti. | Defendants pointed to their answer asserting title/superior‑possession defects and plaintiff’s pre‑Pinti briefing recognizing the notice‑compliance dispute. | Court held the issue was timely and fairly raised (plaintiff’s pre‑Pinti memorandum shows awareness). |
| 3) Did the Oct. 2008 notice strictly comply with paragraph 22 of the mortgage? | Plaintiff contended the notice complied (or at least substantially complied) with paragraph 22. | Defendants argued the notice’s conditional language weakened the required rights notice and failed strict compliance. | The notice failed strict compliance—its “may…have” and conditional phrasing watered down required rights—so foreclosure sale is void. |
| 4) Remedy / effect on title and re‑foreclosure | Plaintiff urged that voiding sales retroactively would unfairly disturb titles and argued for limited prospective effect. | Defendants sought voiding of the sale and relief from eviction. | Court limited expansion of Pinti’s disruption but affirmed voiding of this sale; plaintiff may reinitiate foreclosure with a compliant notice. |
Key Cases Cited
- Pinti v. Emigrant Mtge. Co., 472 Mass. 226 (SJC Mass.) (foreclosure by power of sale invalid unless paragraph 22 notice strictly complied with; prospective effect announced)
- U.S. Bank Nat'l Ass'n v. Ibanez, 458 Mass. 637 (SJC Mass.) (seller under power of sale must strictly follow its terms; failure renders sale void)
- Eaton v. Federal Nat'l Mtge. Ass'n, 462 Mass. 569 (SJC Mass.) (mortgagee must hold mortgage and either hold note or act for note holder; prospective rule applied to parties)
- Galiastro v. Mortgage Elec. Registration Sys., Inc., 467 Mass. 160 (SJC Mass.) (extended Eaton rule to cases pending on appeal that had preserved the issue)
- Pryor v. Baker, 133 Mass. 459 (Mass. 1882) (exercise of mortgagee’s power of sale is closely watched; strict compliance required)
- Foster, Hall & Adams Co. v. Sayles, 213 Mass. 319 (Mass. 1913) (preforeclosure notice requirements are part of the mortgage terms and require strict compliance)