Massachusetts case pits current owner against former parties to foreclosure
All eyes are on the Massachusetts Supreme Court as it works through a complicated 'try title case' that deals with substantive title issues raised against the backdrop of the mortgage securitization process. The case — Bevilacqua v. Rodriguez — involves a Massachusetts homeowner who is challenging a lower court's finding that Bevilacqua, a recipient of a quitclaim deed, has no right to "try title" on the property he currently owns because of a wrongful foreclosure that occurred along the chain of title. The process of trying title is a legal move in which a party asks the court to validate the legitimacy of a title claim. The main party to the case, Francis Bevilacqua III, acquired the property by quitclaim deed from U.S. Bank as trustee and holder of the note in October 2006. According to briefs filed with the Massachusetts Supreme Court, the case is on appeal after a land court held that the landmark U.S. Bank v. Ibanez foreclosure case brought "the validity of the foreclosure (in the Bevilacqua case) into question because there is no evidence that Mortgage Electronic Registration Systems, or MERS, assigned the mortgage to U.S. Bank prior to its foreclosure action against the former owner. The Ibanez case dealt with mortgage assignment issues in the mortgage securitization process. The most recent case Bevilacqua v. Rodriguez pits the rights of Bevilacqua, a third-party who acquired the title in good faith, against the procedural and legal safeguards surrounding the foreclosure process that protects parties from wrongful foreclosures. The Massachusetts Supreme Court, which heard oral arguments in the case this week, will have to determine "whether a person who holds title to property by virtue of a recorded deed, but whose title is clouded by a possible adverse claim due to deficiencies from a prior foreclosure in his chain of title, has standing to try title," according to briefs filed in the case. Timothy Warren, CEO of Massachusetts foreclosure data analytics firm The Warren Group, indicated that the case is being closely watched by real estate, mortgage and default professionals who routinely work on foreclosures. "I think people are being very cautious about purchasing foreclosed properties," said Warren when asked how this case and the Ibanez case are impacting foreclosures in the state. "They just have to be careful. There are going to be some where all of the right procedures were followed and there was no question about the title." But, he said, in other cases, parties are watching their step to make sure the titles are not clouded from foreclosure issues prior to a new sale. Write to: Kerri Panchuk.