Giving an early Christmas present to distressed homeowners, the Supreme Judicial Court today ruled that a foreclosed upon homeowner may challenge a bank’s title and foreclosure sale irregularities through counterclaims in a post-foreclosure eviction in the Housing Court — rather than being forced to file a separate equity lawsuit in the Superior Court. The case is Bank of America v. Rosa, SJC-11330 (Dec. 18, 2013).
The high court also held that the Housing Court has jurisdiction to hear other counterclaims against foreclosing lenders, including fair housing, consumer protection (Chapter 93A), and HAMP related claims.
The likely impact of this ruling will be that the already busy Housing Court will now be “Ground Zero” for foreclosure related litigation. Foreclosed property owners will have more weapons to delay and prevent being evicted after foreclosures.
Overall, while the ruling seeks to protect the rights of foreclosed property owners, it has the potential to delay the housing recovery in Massachusetts. The longer folks who don’t pay their mortgages are allowed to live rent free in their foreclosed houses, the more the housing market suffers. There are plenty of creditworthy buyers and investors willing and able to buy up and rehab these foreclosed properties. Letting them sit and blight neighborhoods doesn’t help anyone in the long run. Just my opinion…
The ruling is embedded below. (Click for link).