Beruflich Dokumente
Kultur Dokumente
Mortgage
Assignment
Comes
Back
To
Haunt
Foreclosure
Lender
in
Juarez
v.
Select
Portfolio
(1st
Cir.
Feb.
12,
2013)
U.S.
First
Circuit
Court
of
Appeals
Reinstates
Borrowers
Wrongful
Foreclosure
Claim
In
a
rare
victory
for
a
wrongful
foreclosure
claimant
at
the
U.S.
Court
of
Appeals
for
the
First
Circuit
in
Boston,
the
court
reversed
a
dismissal
of
the
borrowers
claims,
ruling
that
a
back-dated
mortgage
assignment
rendered
a
foreclosure
void.
The
case
is
Juarez
v.
Select
Portfolio
Servicing,
Inc.
(11-2431)
(click
for
opinion).
Backdated
Mortgage
Assignment
Proves
Fatal
Melissa
Jurez
purchased
a
home
in
Dorchester,
Massachusetts
on
August
5,
2005,
financing
it
with
reputed
sub-prime
lender
New
Century
Mortgage.
The
mortgage
was
packaged
and
bundled
into
a
real
estate
mortgage
investment
conduit
(REMIC),
a
special
type
of
trust
that
receives
favorable
tax
treatment,
ultimately
being
held
by
U.S.
Bank,
as
trustee.
Jurez
could
not
afford
the
payments
on
the
mortgage
and
defaulted.
Foreclosure
proceedings
began
in
the
summer
of
2008,
culminating
in
the
sale
of
her
home
at
an
auction
in
October
22,2008.
She
claims,
however,
that
lender
did
not
hold
the
note
and
the
mortgage
at
the
time
they
began
the
foreclosure
proceedings
against
her,
and
that
the
foreclosure
was
therefore
illegal
under Massachusetts mortgage law. The problem in the case centered around the mortgage assignment into U.S. Bank, as trustee the same problem the same bank faced in the landmark U.S. Bank v. Ibanez case. The Corporate Assignment of Mortgage, appears to have been back-dated. It was dated October 16, 2008 and recorded in the corresponding registry of deeds on October 29, 2008, after the foreclosure had been completed. However, at the top of the document, it stated: Date of Assignment: June 13, 2007, in an obvious attempt to date it back prior to the foreclosure. First Circuit Reinstates Borrowers Wrongful Foreclosure Claims After federal judge Denise Casper dismissed Juarezs claims entirely on a motion to dismiss, the First Circuit reinstated the majority of Juarezs claims. U.S. Bank claimed that the back-dated mortgage assignment was merely a confirmatory assignment in compliance with the Ibanez ruling, but the appeals court concluded otherwise: Nothing in the document indicates that it is confirmatory of an assignment executed in 2007. Nowhere does the document even mention the phrase confirmatory assignment. Neither does it establish that it confirms a previous assignment or, for that matter, even make any reference to a previous assignment in its body. Lacking a valid mortgage assignment in place as of the foreclosure, U.S. Bank lacked the authority to foreclose, the court ruled, following the Ibanez decision. Ms. Juarez will now get the opportunity to litigate their claims in the lower court.
Will Lenders Learn Their Lesson? The take-away from this case is that courts are finally beginning to scrutinize the problematic mortgage assignments in wrongful foreclosure cases. This ruling may also affect how title examiners and title insurance companies analyze the risk of back titles with potential back-dated mortgage assignments. If a lender records a true confirmatory assignment, it must do much better than simply state an effective date. __________________________________________________ Richard D. Vetstein, Esq. is a Massachusetts real estate attorney who writes frequently about new foreclosure issues concerning the real estate industry. He can be reached at info@vetsteinlawgroup.com.