March 31, 2014
by Thomas J. Santolucito
Harmon Law Offices, P.C. – USFN Member (Massachusetts, New Hampshire)
On March 12, 2014, the Massachusetts Supreme Judicial Court (SJC) issued its long-awaited decision in the case of U.S. Bank, N.A. as Trustee v. Schumacher, __ N.E.3d __, 467 Mass. 421. At issue in the case was whether a mortgagee’s failure to comply strictly with the Massachusetts pre-foreclosure right to cure statute, Gen. Laws ch. 244, § 35A (§ 35A), renders a foreclosure sale void. Former owners frequently plead lack of strict compliance with § 35A as a defense to post-foreclosure summary process (eviction) cases. The trial courts in Massachusetts have issued myriad conflicting decisions concerning this issue, making it impossible to predict the outcome of cases where a borrower called a § 35A notice into question.
In Schumacher, the SJC held that the pre-foreclosure right to cure statute did not regulate the foreclosure process itself, but instead sought to permit borrowers an opportunity to cure a default prior to the commencement of a foreclosure. The SJC found that, because § 35A regulates pre-foreclosure conduct, it is not part of the statutory power of sale demanding strict compliance. As such, minor technical inaccuracies in the notice do not render the resulting foreclosure sale void as a matter of law.
In a concurring opinion, Justice Gants noted that, although violations of § 35A do not render a foreclosure void, they may present courts with equitable grounds to set aside foreclosures in cases where a notice is “fundamentally unfair.” Accordingly, borrowers may still petition the superior court, or assert defenses or counterclaims in eviction cases, challenging a foreclosure due to an inadequate § 35A notice. Borrowers will face more difficulty prevailing upon these claims under a “fundamentally unfair” standard rather than the “strict compliance” standard adopted by several trial courts prior to Schumacher.
Schumacher brings much-needed clarity to a very hotly contested and controversial area of Massachusetts foreclosure law.
Editor’s Note: The author’s firm represented U.S. Bank in the lower court through the trial of the Schumacher case.
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