Massachusetts high court rules on foreclosure case

June 29, 2012

BOSTON, Massachusetts: The Massachusetts Supreme Court has unanimously ruled that moving forward, lenders must hold the official mortgage note in order to foreclose on a home. The decision clarifies that lenders who do not hold both the mortgage and the promissory note do not have the right to foreclose. The plaintiff in the case, Henrietta Eaton, had her home foreclosed on in 2009. Green Tree Servicing LLC bid on the home and then transferred the property to Fannie Mae. A lower court blocked Eaton's eviction, saying that the foreclosing entity at the time of the sale must hold both the mortgage and the underlying mortgage note. The high court's ruling applies only to future foreclosures.

Samuel Levine, who argued the case on behalf of Levine, said "We're disappointed that the homeowners who have already lost their homes will not have any recourse under this decision...But we think going forward it will curb the worst practices." Georgetown University Law Professor Adam Levitin said, "If you lost your house in foreclosure, you're not getting it back because of this, but overall, it means homeowners have pretty good protections, namely, you can't be thrown out of your house unless the lender can absolutely prove they have the right to do so." Andrew Wilson, a spokesman for Fannie Mae, said "Going forward, today's ruling will hopefully bring clarity and certainty to the foreclosure process in Massachusetts, which will help the state work through its ongoing housing challenges."