Massachusetts Foreclosure Defense

Watch Out for Illegitimate Foreclosure Relief Organizations

Unfortunately, there are many people looking to make money off homeowners' financial problems. You should always go to a bankruptcy attorney before turning to a group, business, or organization for relief, and you must exercise extreme caution when dealing with debt relief agencies of any kind. This firm cares deeply about the impact that foreclosure has had on society, and is extremely passionate about this legal issue.

Think twice if you are solicited by a bankruptcy firm that:

• Tells you foreclosure defense necessarily involves bankruptcy
• Fails to inform you about "Motion to Lift the Automatic Stay"
• Also look out for firms that prey on homeowners promising that they will get the homeowner a "loan mod."
• Charge you for loan modification
• is out-of-state, but says they can "help you"

Be especially aware of out-of-state entities that say that they can "help you." You are best advised to run, not walk, away from these solicitations, as the only thing that they can "help" you with, is wasting your time and money. Many times these same "entities" are not attorneys, nor are they associated with Massachusetts attorneys. We would never directly solicit a potential client, as it may also violate attorney ethical rules.

Therefore, if you are directly solicited by a bankruptcy attorney, you should ask:

• what specific action they intend to perform for you
• what their specific policy would be if the foreclosing entity files a Motion to Lift the automatic stay
• whether that bankruptcy firm has the ability to handle an adversary proceeding if you wish to challenge the foreclosing entity's legal right to take your home

Turn to The Law Office of Glenn F. Russell, Jr. instead.

If you are confronted by these solicitations please refer these contacts to this office, and we will immediately forward them to the Massachusetts Attorney General's Office for review. Here is an example of a Massachusetts attorney offering "loan mods," where the Attorney General stepped in and shut that business down. That attorney is currently awaiting the result of the Massachusetts Board of Bar Overseers Disciplinary hearing.

Challenge Foreclosure Threats or Make Appeals

Defenses to Foreclosure

You may want to challenge a threatened foreclosure for many different reasons. Do not think that you will lose your home automatically, but also keep in mind that this is an extremely difficult argument, with no guarantee of success. Remembering that you may have options and/or potential defenses available when faced with a possible foreclosure is critical to your effort to find the best solution possible for your situation.

With the help of a qualified Massachusetts foreclosure defense attorney from our firm, you might be able to negotiate a settlement agreement with the financial entity that is seeking to take your home, file for bankruptcy, or challenge the financial entity on the grounds that it was not your original lender.

Foreclosure Appeals

If you have already filed a lawsuit and lost that action, you can still appeal that adverse ruling. However, there are strict timelines that must be followed, which generally means that you have less than 30 days from the date of the entry of judgment to file a notice of appeal with the Court that issued the adverse judgment.

Additionally, when considering whether to appeal an adverse ruling you should very carefully review the Judge's ruling to determine whether there is a legitimate legal basis to challenge the Judge's ruling. Failure to undertake this critical analysis may result in you losing your appeal and having to pay the opposing party(s) legal fees, costs, and all other monies spent in the appeal process.

We have represented many clients in matters on appeal before:

• the Massachusetts Appeals Court
• the Massachusetts Supreme Juridical Court
• the U.S. Court of Appeals for the First Circuit.

Most bankruptcy attorneys do not take on what is known as "adversary proceedings," which is a lawsuit within a filed bankruptcy, and is the only way to challenge a foreclosing entity's right to foreclose in a bankruptcy.

Having this extensive experience allows us to help you make the decision as to whether or not an adverse ruling has any legitimate legal basis to be appealed, and if there is a legitimate basis for appeal.

Foreclosure Process

The foreclosure process in Massachusetts is "non-judicial," meaning that the entity seeking to foreclose does not have to go to court to file any lawsuit to remove you from your family abode or real property. This "non-judicial" process developed at a time where there was actually a "bank" who lent you money, and that bank still actually owned the mortgage, therefore if you were delinquent on the mortgage it really didn't make much sense to take up precious court time on this issue, as there was usually no question that the "bank" had the right to re-possess the home to satisfy the outstanding debt.

The "securitization" process can be complicated.

Unfortunately, today, the majority of mortgage lending now involves the "securitization" process, where the original "lender" immediately sells the right to your monthly principal and interest payments to "investors" in the form of bonds or certificates. This firm successfully argued this issue on behalf of the LaRace family before the Massachusetts Supreme Judicial Court, in the national precedent setting case; U.S. Bank Nat'l Ass'n v. Ibanez, 458 Mass. 637 (2011).

Unless you have taken a loan out from a local bank or credit union, the entity seeking to take your home in foreclosure is not your original "lender." Further confusing the issue is the fact that these bonds or certificates are sold as fractional shares of ownership to the right to payment from the corpus assets of business, and/or New York common law trust, or Delaware Statutory Trust. These trusts are formed pursuant to what is known as a Pooling & Servicing Agreement ("PSA"),which represents the controlling terms of the trust's governing instrument.

Generally these trusts identify a "mortgage servicer" as a "bill collector" who handles the billing and/or the foreclosure process. The problem with this dynamic is the fact that the "mortgage servicer" stands to gain upon the foreclosure of your property, as it is not "their loan" and any proceeds derived from the foreclosure sale are used to satisfy the mortgage servicer fees and costs first. Make no mistake, the "mortgage servicer" is not working with your best interest in mind, and it most certainly does not want you to keep your home.

Massachusetts Non Judicial Foreclosure Process

The "non-judicial foreclosure process" in Massachusetts usually begins with a "notice of default" that is sent to the homeowner, which explains your "options," and further explains that you have the right to bring the loan current (of course, with the added fees and costs piled on by the mortgage servicer and its legal counsel). Massachusetts law gives the borrower a 150-day "right to cure" the arrears.

However, this 150-day window can shrink to 90 days unless the borrower complies with specific legal requirements set out under Massachusetts regulation. Once this period of the right to cure expires, the financial entity will file an "Order of Notice" with the Land Court, which is a lawsuit filed by the foreclosing entity to seek a judicial determination that you are not currently in active military service. The military question is the sole issue under review in these actions, and has nothing whatsoever to do with the actual foreclosure of your home itself.

A Related Case Regarding Active Military Service

Attorney Russell argued one of these cases on behalf of a Massachusetts homeowner before the Massachusetts Supreme Judicial Court which clarified this issue, in HSBC Bank v. Jodi B. Matt,464 Mass 193 (2013). The firm brought the action on behalf of Ms. Matt who was not in active military service, because at the time the law was not clear on these proceedings.

Although the firm successfully obtained a "remand" on this Land Court ruling, forcing the case back to the land court for rehearing, the Massachusetts Supreme Court clarified that from now on only active military service people can challenge these actions. However, the benefit of the ruling resulted in the change in the name of these actions from "complaint to foreclose" to "order of notice," which helped clarify what these proceedings really involve.

What happens after the Order of Notice is filed?

Once the financial entity receives the judgment about military service in the servicemember's action, the foreclosing entity will send the mandatory notice of auction sale to the borrower, as required under G.L. c. 244, Section 14., which requires that any title holder, or entity having any interest in the title to the real property at issue as of 30 days prior to the auction, must be notified of the date and time of the foreclosure auction 14 days prior to the scheduled auction sale. In practice the borrower is usually sent "notice" from the financial entity's lawyer one month prior to the date of the auction.

The notice contains a copy of the publication that will be published in the local paper (as required by statute). This publication is required by statute to be published for 3 consecutive weeks in your "local" paper. The term "consecutive" is strictly enforced, so if the foreclosing entity misses a week, it could not hold the auction unless it started publishing all over again, as there can be no variance from "consecutive."

Once the auction is published for 3 consecutive weeks, unless you the borrower challenged this process, the auction is then held as described in the notice, where the active bidding takes place in front of your house and usually lasts less than 5 minutes, and the house is sold. It's that simple.

If you are thinking about challenging the foreclosure of your home, you would be well advised to be extremely proactive, and begin doing so as soon as you receive the "default notice," providing you 150 days to "cure." Many people wait until they receive the actual foreclosure auction notice, or shortly before the date of the auction sale itself, which generally does not provide sufficient time to draft or create a strong legal defense.

Defenses to the Massachusetts Non-Judicial Process

The typical challenge to a threatened foreclosure involves the drafting of a "Motion for Preliminary Injunction, a Memorandum of Law to support that Motion, as well as drafting an underlying complaint, with exhibits. Yes,you the homeowner, must file a lawsuit to attempt to prevent the auction of your property. This is an extremely difficult argument, one that requires an fierce advocate with extensive experience in this area of the law.

After the filing of all of the above described documents, the following things will occur:

• You will be given 10 minutes (or less) to carefully describe to the Judge exactly why the foreclosing entity does not have the legal right to foreclose.
• The Judge will review your complaint and decide whether or not you, the homeowner, have a better chance than not of being successful on the underlying lawsuit.
• If the Judge's decision is in your favor, he will issue an "injunction" to prevent the auction.

An alternative challenge for a Massachusetts borrower may also lie in filing an action called a "try title" action under G.L. c. 240, Sections 1-5, which is based upon the idea that the claimed mortgage holder is a stranger to your title. Massachusetts is what is known as a "title theory" jurisdiction, meaning that when you originally took out your mortgage, you actually granted the title to your deed to the original "lender," subject only to your right of redemption under G.L. c. 244, Section 18. In other words, when you pay off the underlying debt, your title is returned to you. In technical legal terms this is called a "fee subject to defeasance."

These are also extremely complicated and esoteric legal actions that require experience in arguing these actions. We have heard many stories from Massachusetts homeowners about these cases being brought in the wrong court, and including claims that are inapplicable in these proceedings. These challenges are not well suited for attorneys who only "dabble" in foreclosure defense or have no experience with litigating these complex cases.

Government and Lender Programs

If you can no longer afford your mortgage due to financial setbacks, there may be options available to you that can help keep you in your home. Government and lender programs are created to reduce monthly payments of mortgages, thereby lessening the financial burden. Ultimately, these programs can help you get back on your feet and help you return to making timely mortgage payments.

Mortgage Electronic Registration Systems

Mortgage Electronic Registration Systems (MERS) is a company that holds an electronic registry designed to track ownership of mortgages and loans in the United States. All real estate titles and transactions are subject to state regulations, so MERS provides a central database that tracks all mortgage loans in the nation. To determine if MERS is a contributing factor in your foreclosure, you need to speak with a foreclosure defense attorney immediately. You could have grounds for a dispute.

Mortgage Securitization Process

The mortgage securitization process refers to a complex procedure that involves liquidating assets, cash, property, or receivables as an offering of collateral for investors. Mortgage securitization is extremely common in the real estate and lending industries. Where any sort of mortgage, loan, or property is lent, the securitization process can be applied. Because the process is complex and confusing, we encourage you to consult our firm to reduce your risk of foreclosure or bankruptcy.

Contact The Law Office of Glenn F. Russell, Jr. for aggressive defense!

In the event that you fear you may lose your home due to the inability to keep up with your mortgage payments, or if you have received notice of foreclosure on your home, The Law Office of Glenn F. Russell, Jr. can help!