Our ongoing decade-plus defense of the LaRace family to save their home is now pending before the Massachusetts Appeals Court under Ca. No. 2019-P-1507
The Opening Briefs have now been filed in this case
Wells Fargo continues to rely upon a "confirmatory assignment" that confirms a March 26, 2005 "assignment in blank" (i.e. to no named grantee)
See our brief here
and Wells Fargo Bank, N.A.'s brief here
This action is basically the continuation of U.S. Bank v. Ibanez, SJC-10694, which decision by the Massachusetts Supreme Judicial Court in our favor [U.S. Bank, Nat'l Ass'n. v. Ibanez, 458 Mas. 637 (SJC 2011) made national and international news. Indeed, Jayne Bryant Quinn from CBS News contacted us as well to discuss this case. We were also contacted by CBS News by the producer for 60 Minutes to be part of the segment that ran April 03, 2011 hosted by Scott Pelley However, ultimately the LaRace family declined to take part in the story.
In Ibanez, the SJC never reached the ultimate merits of the foreclosing claimant's claim of ownership of the current right to enforce the LaRace Note, or its mortgage security interest. Therefore,.the SJC focused solely on the procedural defects attendant to the purported use of G.L. c. 244, section 14, and G.L c. 183, Section 21.
While the SJC did not opine as to the ultimate merits of the Trustees claim of ownership, the SJC left many clues that it had serious doubts as to the claim made by Wells Fargo Bank as Trustee that it had "acquired" the LaRace mortgage loan through the "securitization documents".
Wells Fargo claimed as follows:
"Wells Fargo did not provide the judge with a copy of the flow sale and servicing agreement, so there is no document in the record reflecting an assignment of the LaRace mortgage by Option One to Bank of America. The plaintiff did produce an unexecuted copy of the mortgage loan purchase agreement, which was an exhibit to the PSA. The mortgage loan purchase agreement provides that Bank of America, as seller, "does hereby agree to and does hereby sell, assign, set over, and otherwise convey to the Purchaser [ABFC], without recourse, on the Closing Date . . . all of its right, title and interest in and to each Mortgage Loan." The agreement makes reference to a schedule listing the assigned mortgage loans, but this schedule is not in the record, so there was no document before the judge showing that the LaRace mortgage was among the mortgage loans assigned to the ABFC.
Wells Fargo did provide the judge with a copy of the PSA, which is an agreement between the ABFC (as depositor), Option One (as servicer), and Wells Fargo (as trustee), but this copy was downloaded from the Securities and Exchange Commission Web site and was not signed. The PSA provides that the depositor "does hereby transfer, assign, set over and otherwise convey to the Trustee, on behalf of the Trust . . . all the right, title and interest of the Depositor . . . in and to . . . each Mortgage Loan identified on the Mortgage Loan Schedules," and "does hereby deliver" to the trustee the original mortgage note, an original mortgage assignment "in form and substance acceptable for recording," and other documents pertaining to each mortgage.
The copy of the PSA provided to the judge did not contain the loan schedules referenced in the agreement. Instead, Wells Fargo submitted a schedule that it represented identified the loans assigned in the PSA, which did not include property addresses, names of mortgagors, or any number that corresponds to the loan number or servicing number on the LaRace mortgage. Wells Fargo contends that a loan with the LaRace property's zip
code and city is the LaRace mortgage loan because the payment history and loan amount match the LaRace loan.
at p. 649, the SJC stated that an assignment of mortgage is a transfer of an interest in land that requires a writing signed by the grantor
"Like a sale of land itself, the assignment of a mortgage is a conveyance of an interest in land that requires a writing signed by the grantor. See G. L. c. 183, § 3; Saint Patrick's Religious, Educ. & Charitable Ass'n v. Hale, 227 Mass. 175, 177 (1917). In a "title theory state" like Massachusetts, a mortgage is a transfer of legal title in a property to secure a debt. See Faneuil Investors Group, Ltd. Partnership v. Selectmen of Dennis, 458 Mass. 1, 6 (2010). Therefore, when a person borrows money to purchase a home and gives the lender a mortgage, the homeowner-mortgagor retains only equitable title in the home; the legal title is held by the mortgagee. See Vee Jay Realty Trust Co. v. DiCroce, 360 Mass. 751, 753 (1972), quoting Dolliver v. St. Joseph Fire & Marine Ins. Co., 128 Mass. 315, 316 (1880) (although "as to all the world except the mortgagee, a mortgagor is the owner of the mortgaged lands," mortgagee has legal title to property); Maglione v. BancBoston Mtge. Corp., 29 Mass. App. Ct. 88, 90 (1990). Where, as here, mortgage loans are pooled together in a trust and converted into mortgage-backed securities, the underlying promissory notes serve as financial instruments generating a potential income stream for investors, but the mortgages securing these notes are still legal title to someone's home or farm and must be treated as such."
At p. 650 of Ibanez, the SJC stated:
"Turning to the LaRace mortgage, Wells Fargo claims that, before it issued the foreclosure notice, it was assigned the LaRace mortgage under the PSA. The PSA, in contrast with U.S. Bank's PPM, uses the language of a present assignment ("does hereby . . . assign" and "does hereby deliver") rather than an intent to assign in the future. But the mortgage loan schedule Wells Fargo submitted failed to identify with adequate specificity the LaRace mortgage as one of the mortgages assigned in the PSA. Moreover, Wells Fargo provided the judge with no document that reflected that the ABFC (depositor) held the LaRace mortgage that it was purportedly assigning in the PSA. As with the Ibanez loan, the record holder of the LaRace loan was Option One, and nothing was submitted to the judge which demonstrated that the LaRace loan was ever assigned by Option One to another entity before the publication of the notice and the sale.
At p. 651 of Ibanez the SJC stated as follows:
"Where a pool of mortgages is assigned to a securitized trust, the executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder. However, there must be proof that the assignment was made by a party that itself held the mortgage. See In re Samuels, 415 B.R. 8, 20 (Bankr. D. Mass. 2009). A foreclosing entity may provide a complete chain of assignments linking it to the record holder of the mortgage or a single assignment from the record holder of the mortgage. See In re Parrish, 326 B.R. 708, 720 (Bankr. N.D. Ohio 2005) ("If the claimant acquired the note and mortgage from the original lender or from another party who acquired it from the original lender, the claimant can meet its burden through evidence that traces the loan from the original lender to the claimant"). The key, in either case, is that the foreclosing entity must hold the mortgage at the time of the notice and sale in order accurately to identify itself as the present holder in the notice and in order to have the authority to foreclose under the power of sale (or the foreclosing entity must be one of the parties authorized to foreclose under G. L. c. 183, § 21, and G. L. c. 244, § 14)."
Wells Fargo attempted to rely upon n assignment of mortgage "in blank" (naming no grantee) with the idea that somehow the mortgage would follow along with the note to ever held the documents. The SJC identified that such a claim was preposterous under Massachusetts state law:
At p. 652 of Ibanez, the SJC stated:
First, the plaintiffs initially contended that the assignments in blank executed by Option One, identifying the assignor but not the assignee, not only "evidence and confirm the assignments that occurred by virtue of the securitization agreements," but "are effective assignments in their own right." But in their reply briefs, they conceded that the assignments in blank did not constitute a lawful assignment of the mortgages. Their concession is appropriate. We have long held that a conveyance of real property, such as a mortgage, that does not name the assignee conveys nothing and is void; we do not regard an assignment of land in blank as giving legal title in land to the bearer of the assignment. See Flavin v. Morrissey, 327 Mass. 217, 219 (1951); Macurda v. Fuller, 225 Mass. 341, 344 (1916). See also G. L. c. 183, § 3."
Further, the SJC identified that unlike most jurisdictions, under Massachusetts state law,the mortgage does not automatically follow the note
see Ibanez at pp. 652-653
"Second, the plaintiffs contend that, because they held the mortgage note, they had a sufficient financial interest in the mortgage to allow them to foreclose. In Massachusetts, where a note has been assigned but there is no written assignment of the mortgage underlying the note, the assignment of the note does not carry with it the assignment of the mortgage. Barnes v. Boardman, 149 Mass. 106, 114 (1889). Rather, the holder of the mortgage holds the mortgage in trust for the purchaser of the note, who has an equitable right to obtain an assignment of the mortgage, which may be accomplished by filing an action in court and obtaining an equitable order of assignment. Id. ("In some jurisdictions it is held that the mere transfer of the debt, without any assignment or even mention of the mortgage, carries the mortgage with it, so as to enable the assignee to assert his title in an action at law. . . .
This doctrine has not prevailed in Massachusetts, and the tendency of the decisions here has been, that in such cases the mortgagee would hold the legal title in trust for the purchaser of the debt and that the latter might obtain a conveyance by a bill in equity"). See Young v. Miller, 6 Gray 152, 154 (1856). In the absence of a valid written assignment of a mortgage or a court order of assignment, the mortgage holder remains unchanged. This common-law principle was later incorporated in the statute enacted in 1912 establishing the statutory power of sale, which grants such a power to "the mortgagee or his executors, administrators, successors or assigns," but not to a party that is the equitable beneficiary of a mortgage held by another. G. L. c. 183, § 21, inserted by St. 1912, c. 502, § 6."
Wells Fargo Bank also claimed that the assignment received 10 months after the auction was "confirmatory of an earlier assignment". Indeed on the face of the assignment, it referenced a specific April 18, 2007 "effective date" which the May 07, 2008 "confirmed" Wells Fargo also proffered a . The SJC never discussed this date in Ibanez. However, Wells Fargo also claimed that the May 07, 2008 assignment "confirmed the blank March 26, 2005 assignment in blank, which the SJC found impossible under Massachusetts state law. The SJC then examined what is required for an assignment claimed to be "confirmatory" to be legally valid:
see Ibanez at p. 654
"A confirmatory assignment, however, cannot confirm an assignment that was not validly made earlier or backdate an assignment being made for the first time. See Scaplen v. Blanchard, 187 Mass. 73, 76 (1904) (confirmatory deed "creates no title" but "takes the place of the original deed, and is evidence of the making of the former conveyance as of the time when it was made"). Where there is no prior valid assignment, a subsequent assignment by the mortgage holder to the note holder is not a confirmatory assignment because there is no earlier written assignment to confirm. In this case, based on the record before the judge, the plaintiffs failed to prove that they obtained valid written assignments of the Ibanez and LaRace mortgages before their foreclosures, so the post-foreclosure assignments were not confirmatory of earlier valid assignments."
Thus, unlike many assumptions made under subsequent trial and federal court decisional case law interpretation of Ibanez, it was not solely about not receiving an assignment of the mortgage until 10 months after the auction, but rather identifying the glaring dearth of evidence that Wells Fargo Bank in its trustee capacity for the named trust held any demonstrable claim of ownership over the LaRace Mortgage or note.
In the instant matter, Wells Fargo Bank as Trustee again claims that the current assignment is "confirmatory" of an earlier March 26, 2005 assignment under the PSA. We identified to the Land Court Judge that the only document in the record dated March 26, 2006, was the assignment in blank found by the SJC to be void.
We will keep you updated as to the latest haps in this very important case