Massachusetts defective title foreclosure

1201110897_7507Former 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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