Lawmakers To The Rescue? Legislation Filed To Fix “Ibanez” Foreclosure Title Defects

by Rich Vetstein on February 28, 2012 · 14 comments

in Foreclosure, Massachusetts Real Estate Law, Mortgage Crisis, Mortgages, Title Defects, Title Insurance

Update (2/6/14):  Legislation to Fix Ibanez Defects Much Closer to Passage

Update (8/3/12): Foreclosure Prevention Act Signed, But Fails To Address Ibanez Title Problems

Massachusetts Senate Bill 830 Addresses Toxic Foreclosure Titles

Finally, Massachusetts lawmakers have taken action to help innocent purchasers of foreclosed properties in the aftermath of the U.S. Bank v. Ibanez and Bevilacqua v. Rodriguez decisions, which resulted in widespread title defects for previously foreclosed properties. The legislation, Senate Bill 830, An Act Clearing Titles To Foreclosed Properties, is sponsored by Shrewsbury State Senator Michael Moore and the Massachusetts Land Title Association. Full text is embedded below.

The bill, if approved, will amend the state foreclosure laws to validate a foreclosure, even if it’s technically deficient under the Ibanez ruling, so long as the previously foreclosed owner does not file a legal challenge to the validity of the foreclosure within 90 days of the foreclosure auction.

The bill has support from both the community/housing sector and the real estate industry. Indeed, the left-leaning Citizens’ Housing and Planning Association (CHAPA), non-profit umbrella organization for affordable housing and community development activities in Massachusetts, has filed written testimony in support of the bill.

Properties afflicted with Ibanez title defects, in worst cases, cannot be sold or refinanced. Homeowners without title insurance are compelled to spend thousands in legal fees to clear their titles. Allowing such foreclosed properties to sit and languish in title purgatory is a huge drain on individual, innocent home purchasers and the housing market itself.

A recent case in point:  I was recently contacted by a nice couple who bought a Metrowest condominium in 2008 after it had been foreclosed. Little did they know that the foreclosure suffered from an “Ibanez” title defect. Unfortunately, the lawyer who handled the closing did not recommend they buy owner’s title insurance. They have been unable to track down the prior owner who went back to his home country of Brazil, and now they are stuck without many options, unable to refinance or sell their unit. This bill will help people like this who have helped the housing market by purchasing foreclosed properties, and improving them.

The bill is now before the Joint Committee on the Judiciary. Please email them to show your support of Senate Bill 830.
Richard D. Vetstein, Esq. is a Massachusetts real estate and title defect attorney. He can be reached by email at or 508-620-5352.

Massachusetts Senate Bill 830

  • Title

    I am working on a property right now that had a foreclosure in the early 90’s. The foreclosure violated the Ibanez ruling, which was decided 18 years after the foreclosure. The property has sold many times, but the person who owns it now is stuck with it. When the current owners bought the house, the title was fine, Ibanez was decided and the title is defective. They can not sell or refinance. Ibanez has nothing to do with Fraud, Robosigning, or greed. I really suggest that people read the case. It hinges on who holds the “record title” to the mortgage. The bill will not help the banks, there are many safeguards in place to verify that the mortgage holder is in fact the foreclosing party. This bill helps the people who had nothing to do with the previous foreclosure who bought a property that had a clean title prior to Ibanez.

    On a side note, I love how everybody, including the lawmakers, blame the banks instead of the borrowers, who had no problem taking money but when they can’t pay it back they want to shift blame to someone other than themselves. I’ve been around, and in the real estate business for almost 20 years, I’ve never seen a bank foreclose on a person who was paying their mortgage. If you can’t pay it back don’t borrow it. You pay you stay.

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  • watusi

    The banks are surely guilty as charged but the homeowner who finds himself or herself with a major title defect two days before closing is the victim here. Once again the banks stick it to the consumer.

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  • Vegan Taxidermist

    It seems want-to-be homeowners who were so cheap that they didn’t buy title insurance when they bought a foreclosure could simply squat on the land for 20 years and gain good title via adverse possession.

    Who on earth doesn’t buy title insurance?

  • Bob Marley

    On another Note Richard, my amicus brief in the Matt case is
    a work of art, no hyperbole or rhetoric, just a sound and solid brief. You
    might very well be impressed. I am just putting the finishing touch on it and
    will file it next week.  After you read
    it, I would like your honest opinion and I would like you to point out where I might
    be wrong.  


    Bob Marley

  • Bob Marley

    Well Richard, Finally a bank and title company owned politician
    bringing a Bill to absolve the Rampant Fraud perpetrated by the foreclosure slaughterhouses
    in the state of Massachusetts.

    A not so proud day for Moore.

    I will personally appear at every hearing on this Bill in
    opposition. I am going to unite the masses in retaliation.

    This Bill is unconstitutional on its face and is nothing but
    vulgar attempt to absolve the fraud committed by the banks and clear the clouded
    title in 90 days thereby solidifying and completing the final act of FRAUD. Our
    lawmakers are now becoming complicit in the larceny of Massachusetts Homes.

    Yes sir, a proud time in our history.

    Your Friend


    Bob Marley

    •  Bob, what about all the innocent folks who bought properties out of foreclosure and are now saddled with title defects? If the old owner has no objection to the foreclosure, on what possible basis do you content it is fair to saddle innocent folks with a home they do not technically own? What’s your solution?

      • Bob Marley

        Richard, I never came to the table without a solution. I
        understand the complexity created by the egregious wrongdoing of the banks.  I gave them a way out two years ago and
        instead of mitigating the harm, they created, they continued with the theft of America’s
        wealth. Let us not forget how many opportunities they have been given by way of
        government programs to stem the bloodshed. The banks turned those into mockeries.

        With that said, there are other solutions for the purchaser.
        1) Don’t purchase a foreclosed property; if they do 2) Claims against the title
        companies who did the title exam; 3) Claims against the title insurance
        companies. 4) If you join the two perhaps, just perhaps, the insurance
        companies will enjoin the real culprits as it should be and make them pay for
        what they did. 5) sue the banks that sold the foreclosed property.

        Alternatively, we get all the players together at one big
        table, the banks, investors, insurance companies, lawmakers and the homeowners;
        we sit down and resolve this. Last year I suggested this to a Vice President at
        Bank of New York Mellon, and he agreed with me. All the loans in Massachusetts
        naming MERS that were securitized, we rewrite the loans with the appropriate principal
        write down, take out the appraisal fraud, earnings fraud, and the steering perpetrated
        by the lenders, because these were their liar loans not ours, and restore the
        equity that was usurp by fraud. This would be a beginning.

        Richard, we are all suffering in the real estate community,
        but none more so than we in the construction industry are. I and others like me
        have been crippled, financially devastated by what the banks have done and it
        was Wall Street and the banks wrongdoing that sent our entire economy spiraling
        down the drain; further compounding the devastating effects of the foreclosure
        crisis whereas, if people still had jobs, they could pay their bills.

        They destroyed our Nation and instead of criminal
        indictments, there are those who would give them a pass and further perpetuate this
        criminal enterprise upon our society.  

        There are solutions however, those that have robbed us
        blind, do not want to give the money back. Accordingly, where does this leave us?

        For me, the battle will rage on and I will do all I can to
        stop this travesty of justice.


        Bob Marley

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  • Ptan

    This is another bailout of the Bankers.  Because they can now sell these houses without having to worry about putbacks.

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