stating that they “do not suggest that an assignment must be in recordable form at the time of the notice of sale or the subsequent foreclosure sale” and that a “valid assignment of a mortgage gives the holder of that mortgage the statutory power to sell ... regardless whether the assignment has been recorded”
How later courts described this case
- stating that they “do not suggest that an assignment must be in recordable form at the time of the notice of sale or the subsequent foreclosure sale” and that a “valid assignment of a mortgage gives the holder of that mortgage the statutory power to sell ... regardless whether the assignment has been recorded”
- holding that Wells Fargo “did not demonstrate that [it was] the holderf] of the Ibanez and LaRace mortgages at the time that [it] foreclosed on these properties, and therefore failed to demonstrate that [it] acquired fee simple title to these properties by purchasing them at the foreclosure sale”
- holding that in Massachusetts, another “title theory” state, a mortgage assignment need not “be in recordable form”
- holding that a noteholder "has an equitable right to obtain an assignment of the mortgage, which may be accomplished by filing an action in court and obtaining an equitable order of assignment"
Written by the judges who cited it.
The opinion
Cordy, J.
(concurring, with whom Botsford, J., joins). I concur fully in the opinion of the court, and write separately only to underscore that what is surprising about these cases is not the statement of principles articulated by the court regarding title law and the law of foreclosure in Massachusetts, but rather the utter carelessness with which the plaintiff banks documented the titles to their assets. There is no dispute that the mortgagors of the properties in question had defaulted on their obligations, and that the mortgaged properties were subject to foreclosure. Before commencing such an action, however, the holder of an assigned mortgage needs to take care to ensure that his legal paperwork is in order. Although there was no apparent actual unfairness here to the mortgagors, that is not the point. Foreclosure is a powerful act with significant consequences, and Massachusetts law has always required that it proceed strictly in accord with the statutes that govern it. As the opinion of the court notes, such strict compliance is necessary because Massachusetts both is a title theory State and allows for extrajudicial foreclosure.
The type of sophisticated transactions leading up to the accumulation of the notes and mortgages in question in these cases and their securitization, and, ultimately the sale of mortgage-backed securities, are not barred nor even burdened by the requirements of Massachusetts law. The plaintiff banks, who brought *656 these cases to clear the titles that they acquired at their own foreclosure sales, have simply failed to prove that the underlying assignments of the mortgages that they allege (and would have) entitled them to foreclose ever existed in any legally cognizable form before they exercised the power of sale that accompanies those assignments. The court’s opinion clearly states that such assignments do not need to be in recordable form or recorded before the foreclosure, but they do have to have been effectuated.
What is more complicated, and not addressed in this opinion, because the issue was not before us, is the effect of the conduct of banks such as the plaintiffs here, on a bona fide third-party purchaser who may have relied on the foreclosure title of the bank and the confirmative assignment and affidavit of foreclosure recorded by the bank subsequent to that foreclosure but prior to the purchase by the third party, especially where the party whose property was foreclosed was in fact in violation of the mortgage covenants, had notice of the foreclosure, and took no action to contest it.