2015 Mass. App. Div. 198
Mass. Dist. Ct., App. Div.2015Background
- Elaine and Susan Rotondi refinanced their home in 2005, granting a mortgage with Accredited Home Lenders, Inc. as lender and MERS as nominee.
- The borrowers defaulted; on Feb. 17, 2009 Homecoming Financial (identifying itself as servicing agent for U.S. Bank) sent a right-to-cure notice purporting to comply with G.L.c.244, §35A and the mortgage’s paragraph 22.
- The mortgage was assigned to U.S. Bank on July 13, 2010; a foreclosure sale occurred June 17, 2011, with U.S. Bank purchasing the property.
- Trial on U.S. Bank’s possession and occupancy claim occurred in March 2014, shortly after Schumacher (2014) was decided; the trial judge denied a directed verdict on paragraph 22 compliance.
- On appeal, the court held that paragraph 22 of the mortgage requires strict compliance by the named lender (mortgagee) and that Homecoming Financial did not qualify as the lender when it sent the notice.
- Because paragraph 22 was not complied with, the court ruled the title obtained at foreclosure was void and entered judgment for the defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether failure to have the named lender send the paragraph 22 notice invalidates foreclosure | Schumacher means §35A noncompliance doesn’t void title; similar logic should apply to paragraph 22 so notice by servicer is sufficient | Paragraph 22 requires strict compliance by the named lender; notice sent by an entity that did not hold the mortgage is invalid | Paragraph 22 requires strict compliance; notice sent by non-mortgagee servicer was insufficient and foreclosure title is void |
| Whether notice sent by Homecoming Financial (as servicing agent for future assignee) satisfied lender-notice requirement | Servicer’s notice on behalf of U.S. Bank sufficed to preserve foreclosure rights | Servicer lacked authority/interest at the time and thus could not satisfy paragraph 22’s lender-notice requirement | Homecoming Financial did not hold the mortgage when it sent notice; its notice did not satisfy paragraph 22 |
| Applicability/retroactivity of the rule announced in Pinti to this case | U.S. Bank relied on Schumacher timing to validate the foreclosure | Defendants preserved the paragraph 22 claim; rule should apply to pending appeals | Pinti’s rule requiring strict compliance applies to cases pending on appeal here; applied to reverse judgment |
Key Cases Cited
- U.S. Bank Nat’l Ass’n v. Schumacher, 467 Mass. 421 (Mass. 2014) (held §35A noncompliance does not void foreclosure title)
- Pinti v. Emigrant Mtge. Co., 472 Mass. 226 (Mass. 2015) (held paragraph 22 requires strict compliance and failure renders foreclosure title void)
- Eaton v. Federal Nat’l Mtge. Ass’n, 462 Mass. 569 (Mass. 2012) (interpretation of ‘mortgagee’ and application to pending cases)
- Galiastro v. Mortgage Elec. Registration Sys., 467 Mass. 160 (Mass. 2014) (applying Eaton’s interpretation to cases pending on appeal)