Monday, September 19, 2011

Massachusetts High Court To Review Another Foreclosure Case On Direct Review From Trial Court

From The Boston Globe's Real Estate Now blog:

  • Could Eaton v Fannie Mae be the next US Bank v Ibanez? Attorney Richard D. Vetstein explains the next important foreclosure case coming down the Pike:

    In a rare direct appellate review, the Massachusetts Supreme Judicial Court has agreed to hear an appeal considering the controversial “produce the note” defense in foreclosure cases. Perhaps more importantly, the court may also consider whether a foreclosing lender must possess both the promissory note and the mortgage in order to foreclose. This is especially important for MERS mortgages.

    The case is Eaton v. Federal National Mortgage Association (Fannie Mae), The court will hear arguments in October, with a decision coming several months later. The court is also seeking amicus, or friend of the court, briefs from interested parties.


  • Superior Court Justice Francis McIntyre, wrote a 10 page opinion, explaining that Massachusetts has long recognized that although the promissory note and the mortgage can travel different paths after the borrower signs them, both instruments must bereunitedto foreclose.

    The mortgage note has a parasitic quality, in that its vitality depends on the promissory note,” the judge ruled. As is becoming increasingly prevalent, neither the foreclosing lender nor Fannie Mae, which held the loan, could located the original signed promissory note; they were only able to produce a copy endorsed in blank without an amendment, or allonge, indicating when it was endorsed or who held it at the time of the foreclosure. Without the note properly endorsed and assigned to the foreclosing lender, the foreclosure was a nullity, the judge held.

For more, see Produce the note defense. Another SJC case.

No comments: