Title Insurance

A Counterfeit South Carolina Driver’s License, Forged Deed, and a UPS Store In Philadelphia: The Anatomy Of A Title Theft Scam

by Rich Vetstein on September 12, 2024

in Closings, Construction Law, Deeds, Massachusetts Real Estate Law, Real Estate Litigation, Title Defects, Title Insurance

FBI Investigation: Scam Artists Use Forged Deed and Counterfeit ID’s to Steal Concord, MA Property; Local Real Estate Agent, Developer, and Attorneys Caught Up In Fraudulent Transaction

Using a counterfeit driver’s license and passport (shown at right), fake e-mail address impersonating the real owner, and a forged deed and notary stamp, scam artists were somehow able to dupe a local real estate agent and two seemingly experienced real estate attorneys, and get to the closing table, where a Concord, MA lot was fraudulently sold to a local developer, and the scammers getting away with nearly $500,000 in stolen sale proceeds. The transaction had red-flags all over the place, yet all the purported professionals seemed to have buried their head in the sand and ignored the clear warnings of fraud, according to a lawsuit recently filed by my office on behalf of the victims. With a looming FBI financial crimes investigation and active federal grand jury proceeding in Boston, my clients are seeking to restore their title and ownership and recover damages for this title theft scam.

Title Theft: A Brief History

With the proliferation of publicly searchable land records, internet search capabilities, and reliance on electronic communications, “title theft” has become an increasingly prevalent criminal scheme to transfer properties from unsuspecting owners and steal millions of dollars. Property owners across the country have been targeted by scammers who prepare deeds purporting to convey title to property the scammers do not own. Sometimes, the true owners are entirely unaware of these bogus transfers. In other instances, the scammers use misrepresentation to induce unsophisticated owners to sign documents they do not understand.

Massachusetts is no stranger to the wave of title theft schemes. In 2018, convicted felon Allen Seymour and accomplices orchestrated a complex scheme using forged documents, bogus notary stamps, and fake driver’s licenses to defraud several innocent home owners, buyers and lenders in connection with fraudulent sales of properties in Cambridge, Brookline and Somerville, resulting in over $1.5 Million in losses. I represented several victims in those cases which were successfully prosecuted by the Attorney General’s Office, with Seymour sentenced to 6-8 years in prison.

Scam Artists Target A Vacant Lot in Mattison Farms Subdivision in Concord

My clients are an older married couple now living in South Carolina. Back in 1991, they purchased a 1.8 acre lot in the Mattison Farms subdivision in Concord. They originally intended to build a home on the lot, however, the husband’s practice as a cardiologist took the family out of state for several decades. The couple kept the property and paid the real estate taxes all along, hoping at some point maybe they would move back to Massachusetts or gift the lot to one of their three adult sons so they could someday build a home here. The lot is now likely worth north of $1 Million.

At some point in 2023, using a fake email account, the scam artist contacted a local real estate agent, and convinced him that she was the true owner of the Concord lot and interested in selling it. Successful, the broker placed the Property on the Multiple Listing Service with a list price of $699,900, advertising that it was “a great opportunity to build your dream home in the ultra-exclusive, sought after and prestigious Mattison Farm neighborhood. One of the only remaining lots and nestled on a 1.84 acre parcel. Close proximity to Concord & Nashawtuc Country Club.” The broker quickly found an interested buyer in a local real estate agent and developer who had his sights set on building a new luxury home on the Property. Using a fake electronic signature, the imposter signed an offer and purchase and sale agreement with the buyer, agreeing to sell the lot for $525,000 – hundreds of thousand of dollars less than the fair market value of the lot.

Red Flags: Counterfeit South Carolina Driver’s License, U.S. Passport, an Apartment in Dallas, Texas

One of the keys to this successful scam was that the scam artist provided the players involved with a copy of a fake South Carolina driver’s license and US Passport (shown above). However, both identifications display tell-tale signs of counterfeit. The driver’s license and passport both use the same photograph – which is impossible because the state registry of motor vehicles and U.S. Passport Office work off independent systems. The driver’s license layout is clearly fake when compared to a real South Carolina ID, and there’s no evidence of a hologram.

Even more suspicious, despite the ID’s showing a South Carolina residential address, the scam artist suspiciously instructed the seller attorney to send the deed and power of attorney to a nondescript apartment in Dallas, Texas. And when those “signed” documents came back to the seller attorney there were other tell-tale signs of forgery and fraud. Critical portions of the notary clause were left blank; the county of notarization is misspelled as “Tourrant,” instead of Tarrant County, Texas; the notary’s signature is clearly bogus; and the notary stamp was lifted from other documents and transposed using a PDF editing program.

Town Permits and Access

With the real owners blissfully unaware and the professionals apparently not picking up on the fraud, the transaction proceeded forward with the buyer applying for various town approvals for construction. Using a fake digital signature, the scam artist signed various applications for those approvals, which were submitted by the buyer to the Town of Concord. The real owners got a certified letter about the town approvals, and immediately contacted the Concord Natural Resource Director who informed them that the Property was “up for sale.” My client told the director that they absolutely did not list the Property for sale and had no knowledge of any pending sale, and sent her an email demanding that all proceedings be terminated. After that, according to our lawsuit, the director informed the buyer team of my client’s call, however, nothing was done to investigate the potential fraud and stop the approval process. Shockingly, the Town approved the permits without any further inquiry.

Despite All The Red Flags for Forgery and Fraud, the Closing Goes Forward

As of late March into April 2024 – months prior to the scheduled closing – all parties and their attorneys knew or should have known of the existence of irregularities, fraud and/or forgery in this transaction, according to our lawsuit. Yet, none of them put the transaction on pause in order to further investigate whether in fact the transaction involved forgery or fraud, as would be reasonable to do in the circumstances. Despite all of the visible red flags, notice of the true owner’s claim of ownership and likely forgery, the closing of the transaction went forward on May 13, 2024, with the seller attorney executing the closing documents pursuant to the forged power of attorney.

The final and perhaps most telling red flag came at the very end of the closing process with the scam artist instructing the attorneys to send the nearly $500,000 seller proceeds check to a UPS Store address in Philadelphia, PA. So at this juncture we have a South Carolina address on the driver’s license and passport, a Dallas, Texas apartment address for the deed and power of attorney delivery, and UPS storefront in Philly for the proceeds check. As the saying goes, “make it make sense.”

The scam artist received the check, deposited it into a Charles Schwab account, and the money is now gone, along with the title to my client’s property.

To make matters far worse, there is now a $1.8 Million construction loan mortgage on my client’s title, and the “buyer” is well into site work and construction on the Property. The land has been cleared and graded with numerous trees cut down, a foundation poured and a large house framed out, portions of the septic system installed, and utility service brought in, as shown above.

The Aftermath: FBI Investigation And Superior Court Lawsuit

When my client ultimately discovered that their property had been officially sold and that a house was being built on the land, she started shaking and screaming, and then fainted, spending the next days and weeks riddled with anxiety and nightmares. My clients then went to the FBI, Concord Police and the Middlesex District Attorney’s Office to report the matter. The FBI Financial Crimes Squad in Boston is conducting an active investigation of this matter, and FBI agents have already interviewed the two attorneys involved in the transaction who are cooperating. Grand jury subpoenas have also been issued. The scam artists have not been found as of yet.

On September 11, 2024, we filed the lawsuit below for quiet title, trespass, civil conspiracy, and negligence against the buyers, the developer and the attorneys involved in the transaction. My clients are hopeful that they can restore their ownership to their property and get some measure of compensation for this ordeal, which should have never happened. I will keep you posted as to developments. This story is a painful warning to all real estate professionals to be on the look out for title theft scammers from out of state who target vacant properties or unsophisticated owners. And needless to say, always purchase owner’s title insurance when you buy any real estate! There are also “Title Lock” services which claim to monitor your title and ownership but I cannot vouch for them at all.

The CBS 4 Boston I-Team recently did a segment on the case, below.

Verified Complaint Halla Shami v. Geesey, Middlesex Superior Court (Mass.) CA 2481CV02412 by Richard Vetstein on Scribd

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A Ticking Time Bomb: HOA Covenants Across Massachusetts May Have Silently Expired

by Rich Vetstein on July 13, 2024

in Condominium Law, Deeds, Land Court, Massachusetts Property Values, Massachusetts Real Estate Law, Title Defects, Title Insurance

Hundreds of Massachusetts Homeowner’s Association (HOA) Covenants, Conditions and Restrictions (CCR’s) May Be Void and Unenforceable

After a homeowner balked about paying a late fee, I was recently asked by a local homeowner’s association down the Cape to review their Homeowner’s Association Covenants. To my surprise, I discovered that in light of an under-the-radar 2017 Appeals Court ruling, the covenants had silently expired and gone into void and unenforceable status, with no legal ability to resurrect them. Upon further research, I learned that hundreds of HOA covenants across the state may be unwittingly facing the same situation.

Background: Declaration of Restrictive Covenants

In my situation, a “Declaration of Restrictive Covenants” for a subdivision of some 40 lots was recorded back in 1977 with the Barnstable County Registry of Deeds. The Covenants created the homeowner’s association to govern the subdivision, assess HOA fees, and imposed numerous rules and regulations on what could be done by homeowners, including regulating exterior house design and changes, installation of fences, parking of trailers and boats, and trash/recycling. The Original Restrictive Covenants did not specify a duration for which they were effective. Accordingly, by default under Massachusetts law (Mass. Gen. Laws ch. 184, §§ 26-30), the restrictions could only be in place for 30 years, with an option to extend for an additional 20 years upon an owner vote and recording of a formal extension. (Note that the restriction statute does not apply to condominiums). Although the Original Restrictive Covenants provided that the original developer, his successors and assigns reserved the right to “waive, alter, or amend” the restrictions, the document critically failed to provide a clear mechanism for if and how the restrictions could be extended in the future. In my situation, the HOA tried to extend the term of the covenants by the additional 20 years, but unfortunately did so well after the original covenants had already expired.

Berger v. 2 Wyndcliff LLC, Appeals Court (2017)

Based on my analysis of current Massachusetts law, especially new case law considering similar restrictive covenants to the one here, I concluded that the original covenants had expired and that the attempt to extend them was futile. The issue is controlled by a 2017 Appeals Court decision, Berger v. 2 Wyndcliff, LLC, 92 Mass.App.Ct. 517 (2017) which holds that restrictive covenants cannot be extended unless the original covenants contain a clear mechanism for such extension.

In Berger, in the course of developing land in Acton, a developer executed an agreement of protective covenants and easements for the benefit of future mortgagees, buyers, and owners of the land. As is common, the covenants expressly provided that they are to “run with the land” and bind the parties claiming under them “for a period of thirty (30) years from the date these covenants are recorded.” The covenants limited construction on each lot to one single-family dwelling, with a two– or three-car garage. The agreement provided that they “may be amended or revoked, in whole or in part, by an instrument signed by two thirds or more of the then owners of the lots covered hereby, said amendment or revocation to be effective upon recording thereof at the … Registry of Deeds.”

Twenty one (21) years after the original restrictions were recorded, the owners filed an amendment to provide specifically that the original duration would be thirty years from the date the original agreement was recorded, plus that the restrictions could be extended for further periods of not more than twenty (20) years upon a sufficient vote by owners. Shortly thereafter, the owners recorded an extension document purporting to extend the restrictions for the additional 20 years.

In Berger, a disgruntled owner challenged the validity of the restrictions on the basis that they did not clearly provide for a mechanism or right to extend past the 30 year term. Both a Land Court judge and an Appeals Court panel of three justices agreed. As the Appeals Court summarized, the applicable law on restrictions governing subdivisions (referred to also as a “common scheme”) is as follows: “Restrictions on land are generally disfavored, and the Legislature has established procedures by which a landowner may remove or prevent the enforcement of obsolete, uncertain or unenforceable restrictions. At the same time, the Legislature has not precluded landowners from bargaining for, and enforcing, beneficial land use restrictions that contain a lengthy, but definite term of duration. One method the Legislature has employed to address these competing interests is to limit enforcement of restrictions to 30 years generally and, while freely allowing longer durations, requiring landowners to comply with certain specific steps should they desire to impose restrictions lasting more than thirty years. Even restrictions that contain an express durational limitation in excess of 30 years may not be enforced for more than 30 years unless certain steps are taken.”

As noted above, Mass. General Laws provides a “sunset” requirement for all restrictions and extensions as a part of subdivisions: “No restriction imposed after December [31, 1961,] shall be enforceable . . . (b) after thirty years from the imposition of the restriction, unless (1) the restriction is imposed as part of a common scheme applicable to four or more parcels . . . and provision is made in the instrument or instruments imposing it for extension for further periods of not more than twenty years at a time by owners of record, at the time of recording of the extension, of fifty per cent or more of the restricted area in which the subject parcel is located, and an extension in accordance with such provision is recorded before the expiration of the thirty years or earlier date of termination specified in the instrument . . . .” See Mass. Gen. Laws. Ch. 184, § 27.

In the Berger case, the Appeals Court ruled that under the above statute, in order to impose a restriction for more than 30 years, the instrument originally creating the restriction must include a provision for extensions, and this one critically did not. The Court also added that “where extension provisions are not contained in the original instrument, the statutory scheme does not allow subsequent amendments to add new provisions for extensions.” The Court found the original language wholly lacking as to the right to extend where it only provided that the restrictions “may be amended or revoked” and nothing more. Thus, the covenants were now void and unenforceable.

Impact and What Now?

This is a great question. We are now in 2024, so the 30 year period under G.L. c. 184, § 26 would take us back to 1994.

Accordingly, any HOA Declaration of Restrictive Covenants recorded before 1994, which was not properly extended before expiring or contained the fatal defect of not having an extension mechanism at all, is now at risk of having expired unwittingly under the Berger ruling.

This situation likely affects hundreds of HOA’s in Massachusetts, with a fair amount of them being down the Cape, it appears. (Remember condominiums are excluded from the restriction statute, otherwise this would be a complete disaster across the state).

My clients were quite shocked to learn that most of their HOA covenants were now void and unenforceable. When I say “most” I mean that the rules that actively restrict use of property, i.e, design and construction rules, parking, rentals and the like, cannot be enforced. Annual dues and assessments, common area maintenance, etc. likely can be enforced as an “equitable servitude.”

Can a new set of restrictive covenants be recorded and implemented? I’m not so sure of that, given the state legislative policy of setting a hard sunset expiration period. I’m sure some HOA’s will try to get lot owner votes in place and record a new set of covenants as if they were original to the subdivision. We will have to see how this plays out at the registries of deeds and in the courts if these HOA covenants are challenged. I welcome the comments from other conveyancing attorneys and title insurance counsel.

If your homeowner’s association is facing this issue or you need further guidance on this topic, please feel free to reach out to me at [email protected].

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The Massachusetts Lis Pendens: The Definitive Guide For Lawyers and Clients

by Rich Vetstein on January 21, 2024

in Land Court, Massachusetts Real Estate Law, Offer To Purchase, Purchase and Sale Agreements, Real Estate Litigation, Title Defects, Title Insurance

A Massachusetts Real Estate Litigator Talks About Lis Pendens Basics, Strategy, and Pro Tips.

Recently, I gave a well attended webinar for the Real Estate Bar Association on a subject that is near and dear to my real estate litigator’s heart — The Massachusetts Lis Pendens. The webinar was an introductory presentation which I called “Lis Pendens 101,” and covered essentially all the basics from what is a lis pendens, how to get one, how to defend against one, and everything in between. I’m basically going to convert my presentation into this blog post. I’m going to write it for both lawyers and the general public, so some of it may seem basic while other parts may seem complex. Ok, let’s do this.

What Is A Lis Pendens?

Well, let’s start with the Latin translation of the term “lis pendens.” It means “a suit pending.” Here in Massachusetts, a lis pendens is a notice of a lawsuit recorded at the registry of deeds against the title to the particular property at issue in that lawsuit. A lis pendens must be approved by a judge who must find the lawsuit “affects the title to real property or the use and occupation thereof or the buildings thereon.” Once recorded at the registry of deeds, a lis pendens can effectively stop a purchase or sale of real estate from closing, create a “cloud” on title, and otherwise prevent a party from taking adverse action involving the subject property. Additionally, title insurance companies routinely decline to insure a title with a lis pendens on title. The lis pendens really earns its well-deserved reputation as deadly arrow in a real estate litigator’s quiver.

For Which Type of Case Can You Get a Lis Pendens Issued?

The lis pendens procedure is governed by statute, Mass. Gen. Laws ch. 184, sec. 15, and practitioners should be intimately familiar with it. The statutory standard for obtaining a lis pendens is that the lawsuit “affects the title to real property or the use and occupation thereof or the buildings thereon.” Ok, so what does that mean? Some examples of cases that are covered are:

Real Estate Contract Disputes/Specific Performance
Boundary Line/Easement Disputes and Adverse Possession
Quiet Title Actions
Restrictive Covenants

Please note that under the statute, in Zoning/Wetlands Appeals cases, you are not entitled to a lis pendens — this was enacted to keep real estate development permitting from being railroaded by abutter appeals.

How To Get a Lis Pendens

First off, you need an experienced real estate litigation attorney because the process is complicated. The attorney will draft a Verified Complaint which must be signed by the plaintiff client under the pains and penalties of perjury attesting that all facts are true and accurate, and no material facts have been omitted. The “no material facts have been omitted” requirement was added in 2002, and I’ll discuss this below as there has been recent case law on it. The complaint must name as defendants all owners of record and any party in occupation under a written lease. Along with the Verified Complaint, the attorney will file a Motion for Issuance of Lis Pendens, a proposed Memorandum of Lis Pendens, and Motion for Short Order of Notice.

You also have to pick your venue, which is between Superior Court and Land Court. There are a lot of factors which will go into that calculation, including how complex your case is, whether you want a jury trial, and whether you want your case in Boston (Land Court).

The way I handle a lis pendens is that I will file the case in person in the afternoon and seek what’s called a “short order of notice,” which accelerates the time schedule for getting the motion for lis pendens heard by the judge. You get to pick a hearing “return date” and then you must serve a Summons and Order of Notice along with all the other pleadings on the defendant(s) by sheriff or constable. Then you wait a couple weeks until the hearing date and any opposition or special motion to dismiss from the opposing side (which I’ll cover below). If there is a clear danger that the other party will convey or encumber the subject property, you can file the motion “ex parte” – that is, without the other side being notified in advance, however, you have to make that factual showing there is an emergency.

At the hearing on the motion for lis pendens, both sides and their attorneys will argue before the judge whether the case qualifies for the issuance of a lis pendens. In theory, the standard for getting a lis pendens is quite low. There should not be any debate over the merits of the claims; the only issue is whether the case qualifies for a lis pendens. However in practice, especially if the defendants are opposing the lis pendens or have filed a special motion to dismiss, you’ll get deep into the merits of the case at that hearing.

Defending The Lis Pendens

With the 2002 amendments to the lis pendens statute, there are now several ways to attack a motion for lis pendens. When I was first practicing back in the late 1990’s, judges would give out lis pendens like candy. Not anymore.

A party defending a lis pendens may now file a “special motion to dismiss.” If a judge allows the special motion to dismiss, any claim affecting title will be dismissed AND the plaintiff will have to pay the defense’s attorney’ fees and costs. Additionally, the case is basically frozen in place until the special motion is ruled upon. So this remedy has a lot of teeth. However, getting a judge to grant a special motion to dismiss is not easy. You must demonstrate that the action is frivolous because (1) it is devoid of any reasonable factual support; or (2) it is devoid of any arguable basis in law; or (3) the action or claim is subject to dismissal based on a valid legal defense such as the statute of frauds. In my 25 years, I’ve only had a handful of cases thrown out on a special motion to dismiss.

Another way to attack a motion for lis pendens is to focus on what may have been left out of the plaintiff’s lawsuit. Under recent case law, a party’s failure to include all material facts in its complaint or required certification may result in denial of lis pendens and dismissal of that party’s claims where the omitted facts establish that those claims are devoid of reasonable factual support or arguable basis in law. Some cases detailing this strategy are: McMann v. McGowan, 71 Mass. App. Ct. 513 (2008); Galipault v. Wash Rock Invs., LLC, 65 Mass. App. Ct. 73 (2005); DeCroteau v. DeCroteau, 90 Mass. App. Ct. 903 (2016). I’ve used this strategy several times successfully resulting in the judge declining to issue a lis pendens where the plaintiff left out critical facts in his complaint.

The Memorandum of Lis Pendens

If you have the good fortune of convincing the judge to issue a lis pendens in your case, your attorney will have the judge endorse a Memorandum of Lis Pendens form which then is recorded at the registry of deeds. The Memorandum must contain the caption of the case, the record owners, address, and deed reference to the subject along with the judge’s endorsement that: “It is hereby found and ordered that the subject matter of this action constitutes a claim of a right to title to real property or the use and occupation thereof or the buildings thereon within the statutory definition of G.L. c. 184, § 15.” A certified copy of the Memorandum of Lis Pendens along with Affidavit of Service (service by certified mail) must be recorded either in person or through the e-record system.

The lis pendens stays on record (and creating a cloud on title) during the entire pendency of the case, which can go on for many years. That’s what makes it so powerful, and in many cases, can force a party into a favorable settlement or resolution.

Appeals

Ok, you’ve either got your lis pendens or you may have lost and had a lis pendens issued against you. Can I appeal? The answer is maybe, and it’s complicated. An “interlocutory appeal” is available to a Single Justice of the Appeals Court available under G.L. c. 231, s. 118, first and second paragraphs for “any party aggrieved by a ruling [under the statute].” A full panel appeal to the entire Appeals Court is also available. There is a hard 30 day appeal period for both. An appeal covers the denial/grant of lis pendens and a grant of a special motion to dismiss, but not the denial of a special motion to dismiss. Practicioners should review the statute carefully and DeLucia v. Kfoury, 93 Mass. App. Ct. 166 (2018); Citadel Realty LLC v. Endeavor Capital North, 93 Mass. App. Ct. 39 (2018). The best practice is to file single justice appeal and notice of appeal in lower court for full panel appeal.

Dissolution

Once a lis pendens goes on record, it doesn’t go away unless it is properly dissolved. If the parties are fortunate enough to settle the case, dissolving the lis pendens is fairly easy with the attorneys signing and recording a formal Dissolution of Lis Pendens, or a Stipulation of Dismissal, then certified copy of Judgment of Dismissal. If you get the lis pendens dissolved by the court or even better, the entire case dismissed prior to judgment, you’ll need to record certified copy of Order Dissolving Lis Pendens and/or Certificate of Judgment.

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I often refer to the lis pendens as a real estate litigator’s best friend and worst enemy. It can make the difference between winning and losing your real estate case, and most often creates the leverage needed to secure a favorable resolution. If you have any questions regarding the lis pendens process, feel free to email me at [email protected].

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Remote Virtual Notarization Act for COVID-19 Emergency Enacted by Massachusetts Legislature

by Rich Vetstein on April 23, 2020

in COVID-19, Deeds, Land Court, Massachusetts Real Estate Law, Mortgages, Technology, Title Insurance

New Laws Allow Video-Conferencing Technology For Notarization of Legal Documents during COVID-19 Crisis

Update 4/28/20: Gov. Baker has signed the bill. Remote virtual notarizations are now allowed during the COVID-19 State of Emergency!

After what seemed like an eternity during this unprecedented COVID-19 crisis, the Legislature has finally passed a bill providing for the remote virtual notarization of legal documents through video-conferencing technology. The measure will be in place temporarily during Gov. Baker’s declared COVID-19 State of Emergency, and will dispense with the legal requirement for in-person notarizations of real estate, probate and other legal documents requiring a notary public stamp. After over a month of intense lobbying by attorneys and the banking industry, and several revisions to the original bill, the House and Senate finally agreed on a final language today. The measure now goes to Gov. Baker’s desk where he is expected to sign it shortly. This is great news for everyone in the real estate industry as the new law will allow attorneys, paralegals, buyers, and sellers to sign important legal documents safely in their homes during the COVID-19 crisis.

The new law, An Act Providing for Virtual Notarization to Address Challenges Related to COVID-19, provides for a series of requirements and steps to effectuate a valid remote virtual notarization —

Remote notarizations may be conducted through video-conferencing technology such as Zoom or FaceTime. No specific type of technology is spelled out, but we are hearing that title insurance companies and lenders will require real estate closing attorneys to use approved virtual notary software. Some may not however.
All remote notarizations must take place with both the notary and the signatory within Massachusetts state lines. For example, a Massachusetts notary cannot notarize a document of a person signing in New York.
The signatory must show the notary a government issued photographic form of identification (a state issued driver’s license is OK). Non-US citizens must show a valid passport or government I.D. A copy of the front and back of the I.D. must be sent to the notary which must be retained for 10 years.
The notarization must otherwise be conducted in the usual manner over video-conference with the notary observing the actual signing of the legal document and taking the required affirmation, i.e., “this is your free act and deed.”
The original notarized documents must then be sent back to the notary, and for real estate closings, a second video conference must be conducted where the signatory authenticates the signed documents.
Once the above process is complete, the notary or attorney can stamp the documents as notarized, and must also complete and sign an affidavit attesting that all requirements have been met. The affidavit must be kept on file for 10 years.
Each video-conference conducted under the law must be recorded and retained for 10 years.
For real estate transactions and certain probate documents (will, trust nomination of guardian or conservator, durable power of attorney, health care proxy or caregiver authorization, only licensed attorneys (or a paralegal under their supervision) may conduct a remote notarization. For real estate closings, a second form of I.D. may be required.

The new law expires 3 days after Gov. Baker lifts the COVID-19 State of Emergency, at which time, only standard in-person notarizations will be allowed. The text of the bill is embedded below.

Massachusetts Virtual Remot… by Richard Vetstein on Scribd

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Critical Update: Coronavirus (COVID-19) Massachusetts Real Estate Impacts

by Rich Vetstein on March 15, 2020

in Appraisals, Closings, COVID-19, Deeds, Electronic Closings, Housing Court, Land Court, Landlord Tenant Law, Massachusetts Real Estate Law, Mortgages, Purchase and Sale Agreements, Real Estate Litigation, Real Estate Market, Safety, Title Insurance

Significant Impacts Hitting: Registry and Court Closures, Closing and Financing Delays, Social Distancing, School Closings, Quarantine Potential

As I was writing this post tonight, Gov. Baker ordered the shutdown of all schools through April 6, closed down restaurants and bars, and is banning gatherings over 25 people. Also announced tonight is the shut down of all Trial Court facilities on March 16 and March 17, which includes the Cambridge and Suffolk (Boston) Registries of Deeds. We are now hitting the tipping point, and going forward there will be substantial impacts on the real estate and legal industry.

I first wrote about the Coronavirus (COVID-19) global pandemic five days ago. Seems like an eternity ago. As of that writing (data as of March 9), there were 729 reported cases in the US, with 27 deaths. As of tonight March 15, cases have over quintupled with Johns Hopkins reporting 3,722 confirmed cases and 61 deaths. With the well publicized testing delays, the real number of cases are likely far higher.

Registry of Deeds Impacts

As mentioned above, Gov. Baker just ordered the closure of all Trial Court facilities for Monday March 16 and Tuesday March 17. Both Cambridge and Suffolk (Boston) Registries are housed in Trial Court facilities so they will be closed for those two days. I spoke to Maria Curtatone, Registrar of Deeds for Cambridge Middlesex South, and she indicated that this may well be the precursor to widespread shutdown of all registries of deeds and courts throughout the state. We will await further announcements on that.

Update (3/17/20) — Suffolk and Cambridge are closed to the public until at least April 6. Currently, they are both still processing electronic recordings for recorded land. All Land Court recordings and plans must be sent in by overnight or regular mail.

We have just received a chart below showing current Registry status:

I remain concerned, however, that all Registries will be forced to shut down and will not offer in person, mail or electronic recordings. If that occurs, we will see a potentially catastrophic impact to real estate in Massachusetts. Title insurance companies have assured its attorney agents that they will offer “gap coverage” in case recordings are delayed. This coverage offers insurance coverage between the time of the physical closing and the time of actual recording of documents at the registry. However, it remains to be seen how this will play out. Will mortgage payoffs still be processed even though deeds will not be recorded? Will sellers allow buyers to get keys and move into homes if deeds aren’t recorded and their sale proceeds are held in escrow? We will need to work through these issues.

I am also concerned if COVID-19 starts hitting closing attorney offices. If a lawyer or staff member is infected, it could result in the quarantine of their entire office, essentially shutting it down for some time.

COVID-19 Contingency Provision

In my previous post, I discussed a new COVID-19 Impact Clause for Offers Purchase and Sale Agreements. (Sample language below). It is imperative that these clauses are used in both Offers and PSA’s. It’s also very important that all parties and their attorneys work together cooperatively throughout this crisis, acknowledging that there will likely be substantial impacts and delays. The goal, as always, is to get to the closing and complete the deal, by any means necessary.

COVID-19 Impact Provision. The Time for Performance may be extended by either Party by written notice for an Excused Delay which materially affects the Party’s ability to close or obtain financing. As used herein an Excused Delay shall mean a delay caused by an Act of God, declared state of emergency or public health emergency, pandemic (specifically including Covid-19), government mandated quarantine, war, acts of terrorism, and/or order of government or civil or military authorities. Notwithstanding anything to the contrary contained in this Agreement, if the Time for Performance is extended, and if BUYER’S mortgage commitment or rate lock would expire prior to the expiration of said extension, then such extension shall continue, at BUYER’S option, only until the date of expiration of BUYER’S mortgage commitment or rate lock. BUYER may elect, at its sole option, to obtain an extension of its mortgage commitment or rate lock. Notwithstanding the foregoing, said Extension shall not exceed [insert number of days].

Virtual and Remote Closings

Another impact that we are already seeing is that parties to the real estate transaction are afraid of traveling outside their homes right now (or even being visited at home) and being in contact with other people, especially those who are high risk. My colleagues and I are working on an emergency executive order for Gov. Baker to sign which would temporarily authorize remote or virtual closings using such technology as Zoom and Docusign.

For more information on this please read my new post, Massachusetts Remote Notarization Bill Filed in Legislature

Court Closings

Update (3/17/20): The Supreme Judicial Court today ordered that, because of the public health emergency arising from the COVID-19 pandemic, beginning tomorrow (March 18, 2020) and until at least April 6, 2020, the only matters that will be heard in-person in Massachusetts state courthouses are emergency matters that cannot be held by videoconference or telephone. Each of the seven Trial Court departments, in new standing orders to be issued today, will define emergency matters for their departments. As a result of the SJC order, courthouses will be closed to the public except to conduct emergency hearings that cannot be resolved through a videoconference or telephonic hearing. Clerk’s offices shall remain open to the public to accept pleadings and other documents in emergency matters only. All trials in both criminal and civil cases scheduled to commence in Massachusetts state courts between today and April 17, 2020, are continued to a date no earlier than April 21, 2020, unless the trial is a civil case where the parties and the court agree that the case can be decided without the need for in-person appearance in court. Where a jury trial has commenced, the trial will end based on the manifest necessity arising from the pandemic and a new trial may commence after the public health emergency ends. Courts, to the best of their ability, will attempt to address matters that can be resolved or advanced without in-person proceedings through communication by telephone, videoconferencing, email, or other comparable means.

A link to the SJC Order OE-144 is here.

In addition to the closings on March 16-17, the Massachusetts Court System announced over the weekend major “triage” changes reducing the number of persons entering state courthouses. These rules are effective Wednesday March 18, 2020. A link to all of the new changes can be found here — Court System Response to COVID-19. A summary of each court and respective changes are as follows:

Superior Court — All jury trials postponed until April 22. Motions handled by individual judges with preference for telephonic hearing and postponement where necessary to limit number of people entering courtroom. Emergency matters may proceed normally. The new Standing Order 2-20 can be found here.

Housing Court — All cases including evictions (except emergencies) postponed until after April 22. Matters may be heard earlier upon a showing of good cause. New Housing Court Standing Order is here.

Probate and Family Court — Trials postponed until May 1. Motions and pre-trials heard telephonically or postponed until after May 1. Modification complaints won’t be heard until after May 1. New Probate and Family Court Standing Order 1-20 is here.

District Court — No jury trials until after April 21. All criminal appearances rescheduled for 60 days, and no earlier than May 4. Arraignments and Bench trials may proceed. The new District Court Standing Order is here.

Land Court — All trials postponed until after April 21. All other motions and proceedings shall be held telephonically at judge’s discretion. Registration of title documents should not be done in person. Mail or email is now preferred. (Not sure how that will work). New Land Court Standing Order 2 -20 is here.

Appeals Court — Oral argument for March will be telephonic.

Supreme Judicial Court — Please see the Court’s website.

As you can glean from the changes, virtually all trials are being pushed out through the end of April. Motion hearings are court specific with telephonic hearings being substituted for in-person hearings. Of course, if the courts are all shut down, all bets are off. With no staff, the courts will not even be able to handle new filings. The system would just stop in its tracks, except for the most emergency of matters.

Lender/Financing Delays

This week we will see if there are any major disruptions to lenders’ ability to provide financing. I am seeing some smaller mortgage companies moving to remote employee staffing. I’m also hearing about appraisal delays. If there are government employee impacts such as at the IRS for processing tax transcripts, there could be delays with underwriting. I think it’s inevitable that we will be seeing lender delays moving forward.

Municipal Closings

I am also hearing of closings of municipal departments, which may affect the availability of final water/sewer readings and possibly smoke detector certificates. Title 5 inspections could also be impacted.

25 Person Social Gathering Restriction

New restrictions on crowd sizes that Gov. Charlie Baker issued on Sunday, March 15, could upend open houses. The restrictions banned gatherings of 25 or more people. Brokers seemed to anticipate a possible drop-off in attendance, even before Baker’s restrictions and despite strong numbers the past couple of weeks. “Next week may be a different story,” Jason Gell, a Keller Williams broker and president of the Greater Boston Association of Realtors, said on March 12. “Unfortunately, any decline in open houses or listings is likely to make the conditions for buyers even more difficult.”

Social Distancing, School Closures and Possible Lockdown

The impacts of COVID-19 are manifesting not necessarily in the actual infection and sickness of patients (which I’m not discounting at all) but all the measures we are taking to “flatten the curve.” I want to urge all my readers that COVID-19 could wind up being the worst global pandemic since the Spanish Flu and should be taken as seriously as life and death. If you can work from home, do that and don’t go into the office. If you can arrange for remote employee access, please do that. Take advantage of technologies like Zoom, Docusign and Dotloop. Please keep your kids at home. No playdates, family gatherings or hang-outs. They say we are only 2 weeks behind Italy and you see what’s going on there. Stay safe! More updates to follow as I get them.

-Rich

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Judge Wilkins Issues Major Court Ruling in Allen Seymour Deed Forgery Cases

by Rich Vetstein on January 25, 2020

in Deeds, Massachusetts Real Estate Law, Mortgages, Purchase and Sale Agreements, Real Estate Litigation, Title Defects, Title Insurance

Allen Seymour – Arraignment Brookline District Court

Summary Judgment Ruling In Favor of Forgery Victim Allows Case to Proceed to Trial

As I’ve written here, I have been representing three victims in a brazen and complex real estate forgery scam. The ringleader was Allen Seymour of Oxford, who used forged deeds, fake notary stamps and driver’s licenses to sell properties out from under homeowners, flipping their properties to wealthy investors, and pocketing the cash. Seymour targeted properties in Cambridge, Brookline, and Somerville. By accounts, he made off with over $2M in illicit sale proceeds. Seymour also worked with a group of accomplices including a Newton police lieutenant. The cases have been featured in several Fox News 25 segments. While Seymour remains in jail awaiting trial on 22 felony indictments, the civil cases have been ongoing for almost two years, and are heading towards trial.

I just received the first major court ruling in the cases from Superior Court Justice Douglas Wilkins. The ruling is noteworthy because it appears to be the first time a Massachusetts judge has issued a written decision dealing with the unique type of forgery that occurred in this case.

The Deed Forgery Scam

The facts of the case are pretty surreal. My client is the owner of a three family property in Brookline, assessed at $1.5 Million. He was behind on his mortgage, and Seymour (using the alias “Rich Chase”) approached him with a foreclosure rescue scheme. Seymour had him sign a mortgage payoff authorization form which contained a separate signature page with a notary block – which would be used later to perpetrate the fraudulent scam. Ordinarily, mortgage payoff authorizations are not notarized. Behind my client’s back, Seymour took the notarized signature page of the payoff form and attached it to a quitclaim deed and recorded it with the registry of deeds. This deed “sold” the property from my client to Seymour’s accomplice for some 30% of its value, at $480,000. While this was happening, Seymour orchestrated a flip of the property for $750,000 to an LLC owned by Fred Starikov, the owner of City Realty in Boston. Starikov’s LLC then took out a $850,000 mortgage on the property from Bee Investments LLC. Seymour then made off with the sale proceeds, and tried to flee the country with a duffle bag of cash and a trash bag filled with Oxycontin. Fortunately, he was caught in South Carolina by the FBI, and brought back to Massachusetts to face multiple felony charges.

Lawsuit Asserts Claims for Forgery and Fraud

On behalf of the victim, I brought claims for quiet title and fraud, asserting that the quitclaim deed was a forgery. Under Massachusetts law, a forgery of a deed conveys no title. It is null and void, and title reverts back to the original owner as if the forgery never occurred. This is very important in these cases, because a forgery would also avoid the defense asserted by Starikov and his lender being a “bona fide good faith” purchase or lender. This defense, if successful, could allow them to keep title to the property. Starikov and his lender also asserted a claim for “equitable subrogation.” This theory is used to enable a lender to seek repayment of monies paid out in the transaction (typically mortgage proceeds) on the theory of unjust enrichment and mistake.

What is a Forgery?

Starikov and his lender filed a motion for summary judgment to dismiss the case prior to trial, arguing that the deed wasn’t a forgery because my client’s signature was “genuine” and on the deed itself, and asserting the good faith and equitable subrogation defenses. In what appears to be a case of first impression, Justice Wilkins held that the transfer of an altered signature page onto a deed was in fact a forgery under the common law definition. As he wrote in his decision:

Red Flags: Good Faith and Equitable Subrogation

Judge Wilkins also rejected the good faith purchaser and equitable subrogation defenses. As I argued, the judge recognized that there were several “red flags” with the deed and the purchase and sale agreement (which was also forged) which could have put a closing attorney on notice of the irregularities in the transaction. These red flags are properly considered at trial, the judge ruled.

What’s Next?

Overall, I’m very pleased with Judge Wilkin’s ruling. He understood the issues, and provided some much needed justice for my client. So now the case will proceed to trial (or settlement). I will keep you appraised of any further developments. I’ve embedded the entire opinion below for your reading pleasure.

Nelson v. Chandler Cazenove LLC (Middlesex Mass. Superior Court) Jan. 23, 2020 by Richard Vetstein on Scribd

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Vetstein Says “Yes, Always!” to Owner’s Title Insurance in Boston Sunday Globe Magazine Piece

by Rich Vetstein on October 8, 2019

in Closings, Condominium Law, Deeds, Massachusetts Real Estate Law, Title Defects, Title Insurance

Benefits and Affordability Of Owner’s Title Insurance Coverage Praised In Widely Read Article

When my friend Jim Morrison, formerly of Banker and Tradesman and now a freelance real estate reporter, contacted me about an article on owner’s title insurance, I was rather surprised. After all, title insurance isn’t the most “sexy” of real estate topics. However, I did have a whole bunch of horror stories to tell Jim about what happens when buyers don’t elect to get owner’s title insurance coverage. I told Jim the stories and, as always, recounted how I got owner’s title insurance on my own house purchases, even though I was pretty certain the title was clean. The article would be posted on Boston.com, Jim said. Sound great, Jim, thanks for letting me comment, I said.

Well, Jim wrote a fantastic article. And what do you know, but the article was so widely read and shared that the Globe decided to put it in the Boston Sunday Globe Magazine with yours truly featured in the inset! I was thrilled — not only for the good press, but more importantly, to spread the word that owner’s title insurance is a “must-have” for every buyer and a good deal financially.

You can find a link to the article here: What Is Title Insurance, and Why Do You Need It? It is really one of the best articles on owner’s title insurance that I’ve seen in a long time. For all my fellow law colleagues, real estate agents, and mortgage professionals, it’s a great piece to share on your social media feed and client newsletters!

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Typical Suburban Lawn Care Supports Adverse Possession, Appeals Court Holds

by Rich Vetstein on September 4, 2019

in Adverse Possession, Boundaries, Massachusetts Real Estate Law, Title Defects, Title Insurance

A recent court ruling confirms a legal principle in Massachusetts which a lot of folks may be surprised to learn. Under the legal theory of adverse possession, if you mow your neighbor’s lawn and otherwise conduct typical suburban lawn care on that property openly and adversely for 20 or more years, you can claim legal ownership of that area. I’m not kidding, this is the law, and this principle comes up more than you think in boundary line disputes in Massachusetts.

Boundary Line Dispute In Newton

The case is Miller v. Abramson (Mass. Appeals Court Aug. 29, 2019) and is a good example of a classic adverse possession lot line dispute.

The Miller family lives in a single-family home at 11 Fellsmere Road in Newton, on a corner lot at the intersection with Ward Street. The Abramson family lives at 211 Ward Street in Newton. Fellsmere Road dead-ends onto Ward Street. As shown on the plan (left), the back of the Millers’ property directly abuts one side line of the Abramsons’ lot. The parties’ shared lot line is straight, running from Ward Street to the back of the Abramsons’ property. The area disputed by the parties forms a thin triangle, about 492 square feet in size, the base of which is along the Abramsons’ back lot line and one side of which is along the parties’ shared lot line. Since the Millers bought their property in 1986, a line of shrubs and small trees have formed a demarcation of the disputed area from the Abramson’s property. Since 1986 to the present, the Millers and their landscaping company mowed the lawn weekly and undertaken typical residential landscaping work within the disputed area.

Lawn Mowing and Typical Suburban Landscaping Can Constitute Adverse Possession

On appeal after the Millers prevailed at a Superior Court jury-waived trial, the Abramson’s argued that lawn mowing and landscaping was not sufficiently intense a use to establish adverse possession. As I have argued in other cases, the three judge panel confirmed that “typical suburban lawn care” can establish adverse possession so long as it was conducted for 20 or more years. The Appeals Court reasoned that “the context supplied by the surrounding landscape is significant in an adverse possession case — a use that is sufficient to establish ownership in a densely populated neighborhood may be inadequate in an isolated, wooded setting.”

So basically what the Appeals Court is saying is that the uses which would qualify for adverse possession depend on the type of property and the typical uses of land for that type of property. Here, in the single family residential setting, typical suburban lawn mowing, tree pruning and landscaping will be sufficient for a landowner to make a valid adverse possession claim. If the property is in a more open, heavily wooded area, more uses may be necessary, such as cutting trees and clearing the land. Conversely, if the property is in a dense urban area, uses such as paving a driveway, installing a fence, or the like may be enough. It depends on the situation, and every case is different.

Take-Away’s — Get a Plot Plan and Owner’s Title Insurance

As a prospective buyer, seller or real estate agent, how can you minimize the risk of adverse possession and boundary line disputes? The gold standard is to have a licensed surveyor undertake an instrument survey and run survey stakes along all lot lines. However, such a survey does cost upwards of $1,000 or more. Most lenders require a mortgage plot plan (around $125) at closing, however, these are not 100% accurate, but they will typically flag a potential encroachment. Owner’s title insurance with enhanced coverage does provide some coverage (subject to a cap) for boundary line disputes, so I always recommend that buyers get this. While buyers often pay the most attention to inside the home with their inspection, it’s a good idea for buyers to walk the property and try to scope out any potential lot line issues.

If you are dealing with a Massachusetts property line or boundary line dispute, please feel free to contact me at [email protected].

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Allen Seymour, Mastermind of Forgery Scheme, Gets 3-5 Year State Prison Sentence

by Rich Vetstein on August 16, 2019

in Closings, Title Defects, Title Insurance

Horry, SC Booking Photo — Allen J. Seymour

As I’ve written here before, I have been representing three families victimized by convicted felon, Allen Seymour, in a brazen complex real estate forgery scam where he forged deeds and sold properties out from under owners. I’m happy to report that the Worcester Superior Court just sentenced Seymour to a prison term of 3-5 years at MCI-Cedar Junction. This sentence was for his violation of the terms of his probation from his first criminal conviction in a similar scam in 2010. He remains under indictment for 22 counts of forgery, larceny and money laundering in the most recent case involving my clients. We expect that he will receive another substantial prison term once that case goes to trial later this year.

As reported by the Worcester Telegram, Worcester Superior Court Justice Janet Kenton-Walker sentenced Seymour, 52, to 3-5 years in state prison, with 5 years of probation to follow, and also ordered to pay $750,000 in restitution and was prohibited from working in the real estate industry. Assistant Attorney General Edward Beagan had asked Judge Kenton-Walker to sentence Seymour to 6 years in state prison on the violation. He further asked the judge to keep Mr. Seymour on probation on one of the charges and allow the $750,000 restitution order to remain in place.

I have filed three civil actions in Middlesex Superior Court, seeking to quiet title and restore ownership to the victims. The cases are ongoing.

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More Indictments Come Down In AG’s Forgery Investigation

by Rich Vetstein on April 1, 2019

in Deeds, Massachusetts Real Estate Law, Title Defects, Title Insurance

Allen Seymour, 50, formerly of Oxford, MA

As I’ve written here before, I have been representing three families victimized in a well publicized criminal real estate scheme involving forged deeds and the theft of millions of dollars in real estate.

I’m happy to report that Attorney General Maura Healy’s Office has announced a new round of indictments issued by a statewide Grand Jury against the suspected mastermind of the scheme and his son. Allen Seymour, 50, was indicted on charges of larceny of more than $1,200 and four counts of forgery.

Thanks to my clients’ grand jury testimony, Seymour was previously indicted on 22 felony charges of forgery and money laundering. His former wife, Tina Seymour, was also indicted in the scheme.

Seymour, who used the alias “Rich Chase,” targeted elderly and unsophisticated homeowners, using forged deeds and fake notary stamps to sell their properties out from under them, flipping them to wealthy investors, and pocketing the cash. Seymour targeted properties in Cambridge, Brookline, and Somerville. As claimed in my lawsuits, Seymour also worked with a group of accomplices including Newton police lieutenant, Francis Foley III, who was not indicted but remains under investigation and on paid leave from the force.

I have filed three separate civil lawsuits seeking to undo the fraudulent transactions which remain pending. I am hopeful that all of my clients will receive the justice they deserve.

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Mastermind of Complex Forgery Scheme, Allen Seymour, Indicted On 22 Felony Counts

by Rich Vetstein on December 4, 2018

in Deeds, Massachusetts Real Estate Law, Real Estate Litigation, Title Defects, Title Insurance

Attorney General Healy Announces Indictments Against Allen Seymour and Ex-Wife

As I’ve written here before, I have been representing three families victimized by convicted felon, Allen Seymour, in a brazen complex real estate forgery scam. As a result of the courageous testimony from my clients, I’m happy to report that a statewide Grand Jury has just handed down a 22 count indictment against Seymour on charges of forgery, uttering, larceny, and money laundering. Seymour’s ex-wife, Tina Seymour, was also charged with conspiracy to commit forgery.

Seymour, who used the alias “Richard Chase,” targeted elderly and unsophisticated homeowners. He used forged deeds and fake notary stamps to sell their properties out from under them, flipping them to wealthy investors, and pocketing the cash. Seymour targeted properties in Cambridge, Brookline, and Somerville. As claimed in my lawsuits, Seymour also worked with a group of accomplices including Newton police lieutenant, Francis Foley III, who was not indicted but remains under investigation and on paid leave from the force.

Allen Seymour fled the state and was apprehended in South Carolina in May, and is currently being held without bail pending probation surrender hearing scheduled for a later date. He will appear in Worcester Superior Court on Jan. 7, 2019 for a hearing regarding his probation surrender. Tina Seymour will be arraigned in Hampden Superior Court at a later date.

I have filed three civil actions in Middlesex Superior Court, seeking to quiet title and restore ownership to the victims. The cases are ongoing.

First American Title Company has issued a statewide Fraud Agent Alert concerning this scheme.

Boston 25 News reported on the indictment below

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Surviving Wife Not Liable For Mortgage Debt On Marital Home, Appeals Court Rules

by Rich Vetstein on November 15, 2017

in Closings, Massachusetts Real Estate Law, Mortgages, Title Defects, Title Insurance

Court Shoots Down Lender’s Attempt to Expand Doctrine of Equitable Subrogation

In the interesting case of Wells Fargo Bank v. Comeau (Nov. 15, 2017), Justice Peter Agnes of the Appeals Court has held that a surviving wife is not financially responsible for paying back a refinanced mortgage where the wife neither signed the promissory note nor the refinance mortgage, even though she originally held title to the home as a married couple (tenants by the entirety) and signed the original mortgage on the property. In so ruling, Judge Agnes rejected Wells Fargo’s argument to expand the doctrine of equitable subrogation to cover a situation such as this.

Parties to Deed Must Match Up With Mortgage!

Nancy and William Comeau owned their Haverhill home jointly in the traditional Massachusetts form of ownership called “tenancy by the entirety” where title passes automatically to the surviving spouse upon death of a spouse. When the couple purchased the home, they both signed a first mortgage to Haverhill Cooperative Savings Bank. It appears that Nancy was not an applicant for the loan because she did not sign the promissory note. However, the cardinal rule is that the parties to the deed must match the parties to the mortgage, otherwise there will be problems (foreshadowing what happened in this case).

When the couple went to refinance the Haverhill Savings loan with Wells Fargo, only William, the husband, signed the note and mortgage. Big mistake! Since Nancy, the wife, remained on the title as a joint owner, she should have signed the mortgage as well. After the refinancing, William unfortunately dies. His estate is probated, but Wells Fargo makes another mistake and fails to file a claim within the one year probate statute of limitations.

Lender Goes To Court

In an attempt to get Nancy to pay up on the mortgage, Wells Fargo went to Superior Court and made the creative argument that the wife should be responsible under the little known legal doctrine of equitable subrogation which gives courts equitable power to reform mortgages, to restore once-extinguished mortgages, and to adjust priorities among existing mortgages where it is fair and just to do so. Wells lost in Superior Court. On appeal, Justice Agnes agreed, ruling that this case was not appropriate for the equitable subrogation remedy, thereby leaving Wells Fargo with a total loss on its mortgage debt. Judge Agnes reasoned that the situation was entirely of Wells Fargo’s making, and that it had the opportunity to have Nancy sign the mortgage or make a claim against William’s estate, but it failed to do so.

Having handled many title insurance claims in my prior practice, we often used equitable subrogation in cases where a title examiner missed a mortgage in connection with a refinance. Those types of human error would allow for equitable subrogation, however, this case would not, as Judge Agnes correctly ruled in my opinion.

This case is a good example why closing attorneys should always have both married spouses execute the mortgage even if one spouse is not on the loan.

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Land Court Dismisses Foreclosure Challenge Under New Title Clearing Act

by Rich Vetstein on August 21, 2017

in Foreclosure, Land Court, Massachusetts Real Estate Law, Mortgage Crisis, Mortgages, Real Estate Litigation, Real Estate Market, Title Defects, Title Insurance

Kenney v. Brown: First Reported Decision Under Act Clearing Title to Foreclosed Properties

In a ruling applauded by the conveyancing bar and title underwriters, Land Court Justice Robert Foster has dismissed a borrower’s challenge to a 2007 foreclosure sale even though the borrowers recorded an affidavit reflecting the alleged title defect within the time period set by the Act. This is the first court ruling that I am aware of interpreting the new Act Clearing Title to Foreclosed Properties.

The Title Clearing Act, now codified in Mass. General Laws Chapter 244, section 15,was enacted by Gov. Baker last year in an effort to minimize the impact of several troublesome SJC rulings which cast doubt on titles coming out of foreclosures, including the seminal case of U.S. Bank v. Ibanez. The Act establishes a three-year deadline to bring a legal challenge to a foreclosure. To timely bring a challenge, an aggrieved homeowner must file lawsuit challenging the validity of the foreclosure sale, and must also record a copy of the lawsuit in the registry of deeds before the limitations period expires.

The plaintiffs argued that even though the Act expressly calls for the timely filing of a copy of the complaint challenging a foreclosure sale with the Registry of Deeds, the timely recording of their affidavit provided sufficient notice of their claim to satisfy the intent of the statute.

But Judge Robert B. Foster found the plain language of §15 controlled. “The language of the Statute is conjunctive,” Foster ruled. “It requires both the commencement of an action in court and the recording of the complaint or pleading with the registry before the deadline. The recording requirement is not surplusage. It is not simply a notice provision, but rather an additional requirement necessary to file a timely suit.”

Because the plaintiffs failed to comply with §15’s requirement to record their amended complaint within one year of the effective date of the act, Dec. 31, 2016, the judge concluded that their wrongful foreclosure claims were barred.

This is a great ruling for the conveyancing bar. Judge Foster’s decision furthers the underlying purpose of the statute to provide clarity of title in the wake of the foreclosure crisis and the Supreme Judicial Court’s 2011 decisions on wrongful foreclosure in Bevilacqua v. Rodriguez and U.S. Bank National Association v. Ibanez. The whole purpose of the act is to slowly clear away these defective foreclosure titles. It was also important for Judge Foster to clarify that so-called “5B affidavits” do not satisfy the act’s recording requirements. I have seen an increased prevalence of borrowers and attorneys recording bogus 5B affidavits in an attempt to cloud titles and shake down third party buyers and title insurance companies.

The 23 page court opinion can be read below.

Kenney v. Brown (Mass. Land Court) by Richard Vetstein on Scribd

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Appeals Court Upholds MERS Mortgage Assignment System

by Rich Vetstein on July 25, 2017

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

Strawbridge v. Bank of NY Mellon: Appeals Court Justice Peter Agnes Gives Judicial Blessing to MERS Assignment System, Rejects Other Foreclosure Challenges

The most recent foreclosure case heard by a Massachusetts appellate court should allow title underwriters and foreclosing lenders to sleep better at night. In Strawbridge v. Bank of NY Mellon, No. 16-P-1244, embedded below, Appeals Court Justice Peter Agnes upheld the MERS system of holding and assigning mortgages in Massachusetts as a “nominee.” Judge Agnes also ruled that the borrower lacked standing to raise defects in the pooling and servicing agreement by which the bank created a securitized mortgage trust, because she is not a party to that intra-lender agreement. This ruling should simultaneously benefit the housing market, while taking away a major weapon for foreclosure defense attorneys.

The case was brought by well-respected foreclosure defense attorney Glenn Russell, Esq. who represented the borrower, Sandra Strawbridge. Attorney Russell’s cases are typically on the cutting edge of foreclosure defense law, and thus, should always be read with interest.

Foreclosure Challenge

Strawbridge challenged the foreclosure on the grounds that the Bank did not comply with Massachusetts foreclosure law after the SJC’s decision in Eaton v. FNMA which held that a foreclosing lender must establish it holds both the promissory note and the mortgage. (Title companies have issued comprehensive underwriting guidelines after the Eaton ruling). Strawbridge also claimed that MERS’s assignment of her mortgage to the Bank was void because the assignment occurred after a date established in the pooling service agreement (PSA) of the securitzed trust.

Countrywide-MERS Assignment System

In 2007, Strawbridge obtained a $370,000 mortgage from Countrywide Home Loans. The mortgage designated Mortgage Electronic Systems, Inc. (MERS) as the nominee for Countrywide. In 2009, Strawbridge defaulted on her note by failing to keep up with her mortgage payments. In February, 2010, MERS assigned Strawbridge’s mortgage to Bank of New York Mellon which held the mortgage as part of a securitized trust. A MERS “Assistant Secretary and Vice President” executed the assignment, which was notarized and recorded at the appropriate registry of deeds. Later, in March, 2015, a “Second Assistant Vice President” at the Bank’s loan servicer executed an “Affidavit Regarding Note Secured by Mortgage Being Foreclosed.” That affidavit states that the Bank is the holder of the note. In addition, in April, 2015, the Bank’s loan servicer executed a “Certificate Relative to Foreclosing Mortgagee’s Right to Foreclose Pursuant to 209 C.M.R. 18.21A(2)(c),” which certified that the Bank is the “holder of the Mortgage” and “the holder of the Note or is authorized agent of the Note holder with the specific authority to enforce payment and pursue foreclosure of the Mortgage on behalf of such Note holder.” Finally, in July, 2015, the Bank sent Strawbridge a notice of foreclosure sale, informing her that a foreclosure sale would take place in August. The borrower challenged the sale in the Superior Court which ruled against her.

Appellate Rulings

On appeal, Judge Agnes ruled that “MERS’s nominee status does not preclude it from validly assigning the mortgage, or does it limit MERS’s power to exercise a right of [foreclosure] sale.” The Court also rejected the borrower’s argument that the Bank is required to provide a complete chain of assignments of the mortgage, opting instead to hold the Bank to a less onerous standard of merely producing a single assignment directly from MERS, the last holder of record. Lastly, the judge ruled that the borrower lacked standing to raise defects in the pooling and servicing agreement because she is not a party to that intra-lender agreement.

Take Aways

The impact of this decision is a reaffirmation that the MERS system of assigning mortgages remains legal and binding in Massachusetts. MERS mortgages account for the vast majority of conventional mortgage financing in Massachusetts. This ruling will also make it more difficult for distressed homeowners to challenge foreclosures, clearing the way for banks to sell REO property. I spoke to Attorney Russell about the case, and he indicated that he is considering taking an appeal up to the Supreme Judicial Court. So this may not be the last word on the matter.

Strawbridge v. Bank of NY Mellon by Richard Vetstein on Scribd

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Act Clearing Titles To Foreclosed Properties Now Effective

by Rich Vetstein on January 2, 2017

in Closings, Deeds, Foreclosure, Land Court, Massachusetts Real Estate Law, Mortgage Crisis, Mortgages, Title Defects, Title Insurance

Many Titles Automatically Cleared As Of Dec. 31, 2016

While 2016 may have been a tough year for some, the new year brings some relief to those affected by foreclosure related title defects. For some homeowners saddled with bad titles due to improper foreclosures, when the Times Square ball dropped, their titles defects magically disappeared under The Act Clearing Title to Foreclosed Properties. They are now free to sell or refinance after waiting many years in most cases.

The Act, now codified in Mass. General Laws Chapter 244, section 15, was enacted by Gov. Charlie Baker last year in an effort to minimize the impact of several troublesome SJC rulings which cast doubt on titles coming out of foreclosures, including the seminal case of U.S. Bank v. Ibanez. The Act, which I testified in support of at the State House, establishes a new three year statute of limitations for challenging foreclosures and clears titles with foreclosures conducted prior to Dec. 31, 2013, unless the homeowner brought a lawsuit and records it with the Registry of Deeds.

Practice Pointer: Under the Act, any defective title stemming from a foreclosure completed prior to Dec. 31, 2013 is now cured, provided there is no legal challenge filed and complaint recorded with the Registry of Deeds and no other statutory exemption applies. Speak to your title underwriter or consult an attorney for guidance.

Covered Time Period

The Act establishes a three-year statute of limitations period to bring a challenge to a foreclosure. To timely bring a challenge, an aggrieved homeowner must file lawsuit challenging the validity of the foreclosure sale, and must also record a copy of the lawsuit in the registry of deeds before the limitations period expires. The Act reaffirms the mortgagee affidavit requirements of the foreclosure law, including the provision that the recording of a valid affidavit is “evidence that the power of sale was duly executed.” The Act also provides that after three years from the date that the foreclosing lender records a validly executed affidavit, the affidavit serves as “conclusive evidence” that the power of sale was duly executed.

Retroactive Application

The Act applies retroactively. To address constitutionality concerns, for mortgagee affidavits recorded prior to December 31, 2015, the statute of limitations period is the longer of the full three-year period or one year from the effective date of the Act, December 31, 2015. Thus, by the terms of the Act, for all foreclosures completed prior to December 31, 2013, the deadline to assert and record a challenge was December 31, 2016. For foreclosures completed between January 1, 2014 and December 31, 2015, the three year statute of limitations runs from the date of the foreclosure.

No Relief to REO/Fannie Mae Owned Properties, But….

The Act does not apply to mortgagees, noteholders, servicers, their affiliates, or government entities like the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) that continue to hold title to properties following foreclosure sales. The Act only applies “arm’s length third party purchasers for value,” defined as a party who either (1) purchased the property directly at the foreclosure sale, or (2) purchased the property from the bank or another entity at some point after the foreclosure sale, to the extent the power of sale was not duly exercised.” While foreclosing parties, noteholders, and mortgagees will not benefit directly from the Act on properties that they own or service, they will benefit from the resolution of title disputes, the insurability of properties they formerly owned or foreclosed, and the validity of mortgages that they currently service.

Broader Applicability?

The Legislature clearly intended for the Act to resolve title defects arising out of the Ibanez case. But the Act, as drafted, is not limited to just Ibanez defects. It could also be applied to defects arising out of other SJC rulings, including Eaton (promissory note status), Pinti (cure notice) and Schumacher (cure notice). Because the Act is retroactive and silent as to what specific title issues it resolves, a recorded mortgagee affidavit could cure many other issues aside from Ibanez issues. We will see how title underwriters and the courts apply the Act in the months to come. As always, the best practice is to get your title underwriter’s opinion in an email and place in your file.

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Attorney Affidavit Approved To Cure Defective Mortgage Notary Acknowledgment

by Rich Vetstein on September 23, 2016

in Closings, Massachusetts Real Estate Law, Mortgages, Title Defects, Title Insurance

SJC Decision Provides Clarity to Title Attorneys

Now that the summer is over, it’s time to get back to blogging! During the quiet summer months, the Supreme Judicial Court issued an important decision for real estate attorneys and the title community in Bank of America v. Casey (June 16, 2016) (link to case). The SJC confirmed that a statutory curative attorney’s affidavit may be recorded with the registry of deeds correcting a defective notary acknowledgment on a mortgage which otherwise could have invalidated the instrument. This is a very helpful decision, and should result in more titles (and properties) being cleared and sold.

Defective Notary Acknowledgment

In 2005, Alvaro and Lisa Pereira refinanced their New Bedford property with Bank of America, N.A. The Pereiras individually initialed the bottom of each page of the mortgage agreement except the signature page, on which the full signature of each appears. Attorney Raymond J. Quintin, the closing attorney, also signed this page, as the notary to the Pereiras’ execution of the mortgage. The mortgage agreement contains a certificate of acknowledgment (acknowledgment) on a separate page. The Pereiras individually initialed the acknowledgment page at the bottom, but the acknowledgment itself is blank in the space designated for the names of the persons appearing before the notary public, and the Pereiras’ names do not appear elsewhere on the page. Quintin notarized the acknowledgment, affixing his signature and his notary public seal.

Seven years later (which is unexplained in the ruling), Attorney Quintin signed and recorded an “Attorney’s Affidavit, M.G.L. Ch. 183, Sec. 5B” stating that he properly witnessed the Pereiras signing the mortgage and that “through inadvertence, the names of the parties executing this mortgage, Lisa M. Pereira and Alvaro M. Pereira, were omitted from the notary clause.” Parenthetically, these curative affidavits are quite common in the industry.

Approximately six months later, Mr. Pereira filed for bankruptcy and sought to be released from responsibility under the mortgage on the ground that the mortgage contained a material defect — the omission of the mortgagors’ names from the acknowledgment.

SJC–Attorney Affidavits Pursuant to G.L. c. 183, sec. 5B May Cure Defective Notary Acknowledgment

The Court first went over the general rule that a defective notary acknowledgment is usually grounds to void any recordable instrument altogether. Mass. General Laws chapter 183 section 5B provides a cure to this problem by providing that “an affidavit made by a person claiming to have personal knowledge of the facts therein stated and containing a certificate by an attorney at law that the facts stated in the affidavit are relevant to the title to certain land and will be of benefit and assistance in clarifying the chain of title may be filed for record and shall be recorded in the registry of deeds where the land or any part thereof lies.”

The Court then ruled that the curative affidavit recorded by the closing attorney cured the defect and validated the mortgage. The Court said the attorney’s affidavit must comply with the formal requirements of § 5B, attests to facts that clarify the chain of title by supplying information omitted from the originally recorded acknowledgement, and references the previously recorded mortgage. As long as it does that, the problem is solved.

This isn’t a “sexy” opinion, but it is nevertheless important to the real estate bar and community.

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AG Rejects Challenge To Foreclosure Title Clearing Law

by Rich Vetstein on January 20, 2016

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

Good news to report today! Massachusetts Attorney General Maura Healy has summarily dismissed a petition by the Massachusetts Alliance Against Predatory Lending (MAAPL) to repeal the Act Clearing Titles to Foreclosed Properties. The Act would automatically cure foreclosure related title defects after a one year waiting period.

In a three-page letter to Secretary of State William Galvin yesterday, Healy wrote, “I have concluded that it is not lawfully the subject of a referendum petition.” Healy’s main citation for the denial is a clause in the state constitution that says no law related to the power of the courts can be subject to a voter referendum.

As reported by Banker and Tradesman, Attorney Doug Troyer, co-chair of the Massachusetts Real Estate Bar Association’s Legislation Committee, said he thought the attorney general made the right decision. “It looked like the attorney general really took it into consideration, taking over 20 days to fully analyze all aspects in order to see if the petition could lawfully go to a referendum – and found that it couldn’t,” he said.

Opponents to the Act vow they will challenge it in court. However, they need to find a live case which may be difficult. Going forward, the Act will remain law, and after the one year waiting period, most Ibanez related title defects will be automatically cured by operation of law. Good news for the market!

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Anti-Foreclosure Activists Challenge Title Clearance Act

by Rich Vetstein on January 17, 2016

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

Former Green Party Gov. Candidate, Grace Ross, Leads Repeal Effort

A group of anti-foreclosure activists recently filed a petition to repeal the Act to Clear Title to Foreclosed Properties, which was signed by Gov. Baker just before the new year. The leader of the repeal effort is Grace Ross, the former gubernatorial candidate and coordinator of the Massachusetts Alliance Against Predatory Lending.

The new law, which aims to protect homeowners who purchased foreclosed properties with defective titles, has already gone into effect, but activists are using a seldom-used referendum process to try to suspend the law and put it on the ballot in November 2016. However, they need over 43,000 signatures to do this. Ms. Ross struggled to get 15,000 signatures for her 2010 election bid. They also plan to sue to block the law, however, no lawsuit has been filed to date.

As reported in Massive.com, State Sen. Will Brownsberger, D-Belmont, who worked on the bill as chairman of the Legislature’s Judiciary Committee, said he thinks the law will stand. “I think it’s a sound bill,” Brownsberger said. “I think it’s a complicated area, and there are people who interpret the law differently, but I’m pretty confident that we got the basics right and the bill will be upheld.”

The goal of the bill is to protect the rights of homeowners who legally purchased a house that was once foreclosed on. “Once a house has been sold to a third party, they shouldn’t have to worry forever about whether there was some problem with the mortgage way back when,” Brownsberger said.

Brownsberger said lawmakers tried to protect the rights of foreclosed homeowners by preserving their ability to sue for damages. “It’s not in the interest of anybody to keep legal matters open and unsettled for years,” Brownsberger said. “What this is designed to do is create some finality and stability in the housing market.”

The Massachusetts Land Title Association, which represents title insurers, was the major proponent of the bill. (Disclaimer: I also testified in favor of the bill on behalf of the Boston Bar Association). Thomas Bhisitkul, president of the Real Estate Bar Association for Massachusetts, said the law will help homeowners who may be two or three owners removed from a foreclosure but who found themselves unable to sell or refinance after the Supreme Judicial Court ruling.

I would be surprised if the activists’ repeal efforts are successful, and I am confident in the constitutionality of the new law. However, this being Massachusetts, anything is possible. I will, of course, keep the readers posted as to developments.

Until the Attorney General, Secretary of State or a court says otherwise, the Act remains valid and in full force and effect. Attorneys, check with your title rep for specific guidance.

Photo Credit: Boston.com

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The Force (Of Law) Awakens | Annual Year In Review

by Rich Vetstein on December 27, 2015

in Consumer Financial Protection Bureau, Foreclosure, Landlord Tenant Law, Massachusetts Real Estate Law, Realtors, Rental Housing, Title Insurance, TRID

As with this year’s blockbuster Star Wars — The Force Awakens, my prediction for an active and entertaining 2015 in Massachusetts real estate law has come to fruition. Without further ado and with a Star Wars theme, I present you with the top 5 “episodes” for the last year in Massachusetts real estate law.

I. TRID (Truth in Lending RESPA Integrated Disclosure) Rules

Heralded as the most comprehensive change to real estate closings in the last 20 years, the new TRID rules (Truth in Lending/RESPA Integrated Disclosure) have certainly lived up to their billing. If TRID were a Star Wars character, it would be Kylo Ren of the First Order, smashing and destroying the old way of doing closings with his scarlet cross-guard lightsaber. The new rules went into effect on October 3, and the real estate industry has been, by and large, scrambling to get up to compliance speed with the new regulations. The new “Closing Disclosure” is quite convoluted with far too much information, and also necessitates a separate “seller” closing disclosure. So, the old three page HUD-1 form has turned into two forms with seven pages. That’s the government for you… There is also a 3 day waiting period for closings to be scheduled after the issuance of the new Closing Disclosure. Some lenders have been great getting the “CD” out on time. Some others, not so much. In my estimate, I would say that at least 50% of my transactions have been delayed due to TRID related issues. For 2016, I predict continued delays and compliance issues for the first two quarters of the new year, with things hopefully smoothing out for the spring market. Oh, did I already tell you that I miss the old HUD-1 Settlement Statement already!

II. SJC Rules Real Estate Agents Can Remain Independent Contractors

The summer saw the SJC come down with its long awaited ruling on independent contractor classification in Monell, et al. v. Boston Pads, LLC. After much lobbying from the industry, the Court ruled that Massachusetts real estate and rental agents can remain classified as independent contractors under the state’s real estate licensing and independent contractor law. The ruling keeps the traditional commission-only independent contractor brokerage office model in place, with brokers allowed to classify agents as 1099 independent contractors, without facing liability for not paying them salary, overtime or providing employee benefits. However, like the plot holes in The Force Awakens, the Court left open a few important questions such as whether agents could build a case on other legal theories. In 2016, look for the Legislature to address the murkiness which remains with the law.

III. Gov. Baker Signs Foreclosure Title Clearance Law

If Gov. Charlie Baker were a character out of the Force Awakens, he would be the hotshot Resistance pilot Poe Dameron, swooping down in his X-Wing fighter and saving the day for thousands of Massachusetts homeowners who have been unable to sell or refinance their homes due to foreclosure title defects. After a five year legislative struggle (in which I testified before the Legislature), Gov. Baker signed into law the Act Clearing Title To Foreclosed Properties. The bill will resolve potentially thousands of titles which were rendered defective and un-transferable after the SJC’s landmark ruling in U.S. Bank v. Ibanez. There is a one year waiting period, but after that we should start seeing previously unsellable homes start to come back on the market.

IV. SJC Continues To Scrutinize Foreclosure Compliance

In a major foreclosure decision, the Supreme Judicial Court ruled in Pinti v. Emigrant Mortgage Co. Inc. that a lender’s defective notice of default is grounds to void and nullify a foreclosure sale. This is so even after the property was purchased at auction by a third party without knowledge of the defect. This ruling has resulted in two leading title insurance companies, First American and Fidelity/Chicago, deciding to restrict underwriting title to foreclosed properties

V. Just Cause Eviction Proposal

The upcoming year will see a looming “Resistance” battle between liberal tenant activists and small property owners over a Just Cause Eviction proposal submitted to the Boston City Council. As I’ve written here, the proposal is just a clever re-branding of rent control which was outlawed a decade ago and has been proven not to work by leading economists and city planners. The Just Cause Eviction petition would prohibit a landlord from evicting any tenant except for certain serious “just cause” grounds, making it very difficult and expensive to evict tenants at will or those whose leases have expired. Small property owners claim — and I agree — that the procedural impediments to the Just Cause Eviction proposal are shockingly socialist in nature. Everyone agrees that Boston has a problem creating affordable housing, however, rent control disguised as a just cause eviction proposal is not the answer. It’s not fair to make small property owners to bear the burden of creating affordable housing across the city. That’s the job of the government. Rent control has never been a successful solution to the housing problem. To be continued in Episode VIII…

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I hope everyone has a very happy, healthy and prosperous New Year! –Rich

Photo credit: Lucasfilm, Inc.

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Foreclosure Title Clearance Bill Signed Into Law

by Rich Vetstein on December 1, 2015

in Deeds, Foreclosure, Land Court, Massachusetts Property Values, Massachusetts Real Estate Law, Mortgage Crisis, Mortgages, Title Defects, Title Insurance

New Law Will Resolve Thousands of Foreclosure Title Defects In Wake of U.S. Bank v. Ibanez Ruling

After a five year legislative struggle (in which I testified before the Joint Judiciary Committee), I’m very pleased to report that Governor Baker has signed into law the Act Clearing Title To Foreclosed Properties (Senate Bill 2015), embedded below. The bill will resolve potentially thousands of land titles which were rendered defective and un-transferable after the SJC’s landmark ruling in U.S. Bank v. Ibanez. The Ibanez ruling invalidated thousands of foreclosures across the Commonwealth due to lenders’ paperwork errors.

The problem addressed by the legislation is that scores of innocent buyers purchased these foreclosed properties, fixing them up, renting them out, etc., but they were unaware of the title defects — only to discover them once they went to refinance and sell. Title insurance companies have been bogged down trying to solve these defects, and in the meantime, many of these innocent folks are left with homes which cannot be sold or refinanced. The same bill passed the Legislature last year, but former Gov. Patrick, bowing to housing activists, vetoed it with a poison pill. After several amendments addressing housing activists’ concerns, a new bill was again passed, and just signed into law by Gov. Baker on November 25, 2015.

The bill, which is effective on Dec. 31, gives foreclosed owners a three (3) year statute of limitations to file a challenge to a foreclosure, after which the foreclosure is deemed to have been conducted legally. For foreclosures which have already been concluded, the new law has a one year waiting period, so that a defective foreclosure would be considered non-defective on Dec. 31, 2016. The bill does retain a homeowner’s right to seek compensatory and punitive damages for a wrongful foreclosure, provided it is within the statute of limitations. The bill also requires the Attorney General’s Office to spearhead more robust foreclosure prevention solutions with the HomeCorps Program and housing activists groups.

The passage of the bill is fantastic news for both owners and potential buyers/investors of foreclosure properties. There is a shadow inventory of defective title properties which will be able to go on the market.

The bill was sponsored by Millbury Democrat Michael Moore whose office (especially Julie DelSobral) worked tirelessly for the passage of the Act.

MA Act Clearing Title to Foreclosed Properties by Richard Vetstein

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Photo Credit: Boston.com

The Force (Of Law) Awakens | Annual Year In Review

Photo credit: Lucasfilm, Inc.

Foreclosure Title Clearance Bill Signed Into Law

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