Breaking News: Gov. Patrick Effectively Kills Act Clearing Titles to Foreclosed Properties

by Rich Vetstein on August 11, 2014 · 17 comments

in Foreclosure, Mortgage Crisis, Mortgages, Title Defects, Title Insurance

mass ibanez titleSenate Bill 1987 Would Have Cleared Title For Innocent Homeowners

Acceding to the demands of fair housing community activists, Massachusetts Governor Deval Patrick has rejected Senate Bill 1987, An Act Clearing Titles to Foreclosed Properties. The bill would have cleared title of homes affected by defective foreclosures with a one year waiting period from enactment of the bill while giving homeowners three years to challenge wrongful foreclosures. The Governor filed an amendment to the bill, raising the statute of limitations for homeowners to challenge foreclosures from 3 years in the current bill to 10 years. The Senate and House are unlikely to agree on such an absurdly long statute of limitations, so Patrick’s action should effectively kill the bill.

This is truly devastating news for the thousands of innocent homeowners who are stuck with bad title due to botched foreclosures.

The bill had cleared the Senate and House with near unanimous support. The bill also received favorable press in the Worcester Telegram and Boston GlobeThe bill preserves the right to challenge foreclosures and sue the banks, while helping innocent homeowners stuck with bad title. Despite this, organizations such as the Massachusetts Alliance Against Predatory Lending and activist Grace Ross were successful in getting Governor Patrick on their side.

The Governor’s statement accompanying his action on the bill states as follows:

Massachusetts is emerging from a period of far too many foreclosures, on far too many families, and in far too many communities facing significant economic challenges. It is no secret that, too often, the foreclosure was not properly effectuated.  The entity purporting to foreclose did not have the legal authority to do so.  The effect of these impermissible foreclosures has been lasting.  Families were improperly removed from their homes.  Buyers who later purchased the property — or, at least, believed they had done so — are now faced with title questions.  Many of these buyers were investors, but many are now homeowners themselves. I commend the Legislature’s effort to address these problems.  But I believe the proposed three year period is insufficient.  A family improperly removed from its home deserves greater protection, and a meaningful opportunity to claim the right to the land that it still holds.  The right need not be indefinite, but it should extend for longer than three years.  Certainty of title is a good thing — it helps the real estate market function more smoothly, which ultimately can help us all.  But this certainty should not come at the expense of wrongly displaced homeowners or, at least, not until we have put this period further behind us.

As a long time supporter of this bill, I am truly disheartened at this result. I thought the bill did a great job in balancing the rights of innocent home buyers who are stuck with unsellable properties through no fault of their own with the rights of folks who are fighting foreclosures. A three year statute of limitation — which is the same length for malpractice and personal injury claims — is a reasonable amount of time to mount a challenge to a foreclosure, especially when debtors have many months prior notice before a foreclosure sale. The people who would have benefited from this bill are everyday people who bought properties out of foreclosure, put money into them and improved them. I have personally assisted several of these families. Everyone agrees that the banks are largely at fault for the mess left behind with the foreclosure crisis but why put the rights of those who don’t pay their mortgages above those who do? I will never understand this rationale. Perhaps that’s why I could never be in politics!

So where do we go from here? I honestly don’t know. Fortunately, the Land Court recently issued a ruling which may help clear some of these toxic titles. Maybe the legislation will get another chance at the next session or when Patrick leaves office at the end of the year.



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  • Bob

    My house was practically sold til last week (closing this week), when the buyer found a defect in the title due to Ibanez. I didn’t know there was a defect when I bought it, fixed it up, lived in it, rented it, put it on the market… If it was foreclosed on improperly, why do I have to pay for this? Why not the bank that foreclosed? My story is crazy so I won’t go in to it, and how it’s going to affect my life is even crazier. And I’m a bad guy for buying a house? That’s all I did.

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  • I also agree, very devastating news for innocent homeowners who stuck with bad title due to botched foreclosures. I’ve forwarded your news to many other guys also. Waiting for more news from your end.

  • The lenders who convey foreclosed properties give quitclaim warranties of title which are the highest under the law. Again, the vast majority of buyers of foreclosed properties are regular folks. These properties are on MLS, etc. These people are innocent, even more so than the folks who were unable or unwilling to pay their mortgages.

    • GuyFawkesIsAlive

      “Innocent” yeah, fuck you.

    • GuyFawkesIsAlive

      I ask you Richard, as a closing attorney, are you accepting the bankers’ “lost note affidavits’ and an indemnity agreement to convey sellers properties without the original promissory notes??? ARE YOU?
      Because if you are, you are just as bad as the bankers. And the sellers to these properties have a right to know that you are conveying without extinguishing the debt.

    • GuyFawkesIsAlive

      BTW, the title companies and closing agents are just as culpable in this whole crime spree as the bankers. That goes for closing attorneys too.

    • Pontential Homeowner

      I am one of those potential buyers of an existing Ibanez property, foreclosed upon over 10 years ago, with multiple owners in the interim, and the defect recently discovered. Should I run away (I plan to stay in the house 10+ years), or is there any possibility of a legislative solution in this session?

  • littlefolk

    May your title never be cleared, until the thieves are properly and undeniable pointed out and exposed in the media and courts. With that, the regulatory or, so called, public servants.

    • GuyFawkesIsAlive

      “May your title never be cleared” LOL
      Truer words, my friend, truer words.

      • littlefolk

        **The criminal act has to be of sufficient magnitude that it overwhelms the affected jurisdiction’s or program’s ability to respond to the event. *****

  • GuyFawkesIsAlive

    “This is truly devastating news for the thousands of innocent homeowners who are stuck with bad title due to botched foreclosures.”
    They aren’t “innocent homeowners” if they bought a foreclosure. They are people who are in collusion with the criminal financial industry. And they should have known better. You never buy a property that does not provide you any warranties. Duh. They got what they paid for which is a house that has a corrupt chain of title and hopefully the former owners come back and take it.

    • You don’t pay your mortgage, you lose your home. Very simple concept.

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