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Massachusetts: Post-Foreclosure Title Clearing Law Enacted

Posted By USFN, Monday, January 25, 2016
Updated: Friday, February 19, 2016

January 25, 2016


by Francis J. Nolan
Harmon Law Offices, P.C. – USFN Member (Massachusetts, New Hampshire)

Massachusetts has enacted long-awaited legislation intended to resolve title defects resulting from a 2011 Supreme Judicial Court decision (U.S. Bank, N.A. v. Ibanez, 458 Mass. 637), which retroactively invalidated a significant number of foreclosures already on title. The bill, now known as Chapter 141 of the Acts of 2015, provides that the standard post-foreclosure affidavit of sale required by G.L. c. 244, s. 15 becomes conclusive evidence in favor of arm’s-length purchasers for value that the foreclosure was conducted in accordance with Massachusetts foreclosure laws, once the affidavit has been on record for three years and the borrower has vacated the premises.

The bill’s effective date was December 31, 2015, but because the bill provides a one-year period for borrowers whose foreclosure affidavits were recorded more than three years ago to come forward and sue, no affidavits will be considered conclusive evidence until 2017 at the earliest.

The bill has already survived one challenge since it was signed by the governor in December. A group of foreclosure activists who had bitterly opposed the passage of the law, and had successfully lobbied the previous governor to block a similar bill from being passed a year earlier, submitted a petition to the Secretary of the Commonwealth seeking to place a referendum on the November 2016 ballot for voters to decide whether to repeal the law. However, the state attorney general issued an opinion letter (dated January 19, 2016), concluding that the petition was constitutionally impermissible because the bill, in part, expanded the housing courts’ jurisdiction to hear counterclaims in post-foreclosure eviction actions, and thus fell under the “powers of the courts” exception to the constitutional petition process.

Activists have vowed to challenge the constitutionality of the new law in court at the earliest opportunity, which may come later this year or early next year. For the time being, the curative law remains in effect, and absent judicial pronouncements to the contrary, Massachusetts homeowners who have found themselves unable to sell or refinance their property because of old Ibanez problems may finally have their titles settled.

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