Clearing foreclosed homes out of the nation's overall real estate market got a little bit more uncertain last week when the Massachusetts Supreme Judicial Court ruled against two banks in related foreclosure cases.
The two banks, U.S. Bank and Wells Fargo, sought a declaration from the highest Massachusetts court that they had clear title to two properties they had foreclosed upon and could therefore sell them. But in a Jan. 7 decision, the court upheld a lower court ruling that the banks had not shown they actually owned the properties upon which they were entitled to foreclose.
"What is surprising about these cases is not the statement of principles articulated by the court regarding title law and the law of foreclosure in Massachusetts, but rather the utter carelessness with which the plaintiff banks documented the titles to their assets," wrote Justice Robert Cordy in his concurrence to the opinion.
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"The plaintiff banks, who brought these cases to clear the titles that they acquired at their own foreclosure sales, have simply failed to prove that the underlying assignments of the mortgages that they allege (and would have) entitled them to foreclose ever existed in any legally cognizable form before they exercised the power of sale that accompanies those assignments," Cordy added before concluding: "The court's opinion clearly states that such assignments do not need to be in recordable form or recorded before the foreclosure, but they do have to have been effectuated."
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