18 MASSACHUSETTS LAWYERS JOURNAL | JANUARY 2012 PROPERTY LAW Ibanez, Bevilacqua made simple for the non-conveyancer chusetts (REBA) Title Standard 58, as ad- Following these decisions by the Land BY THOMAS L. GUIDI opted in 1995, provided that a title is not THOMAS L. GUIDI Court, REBA suspended paragraph 3 of defective by reason of “[T]he recording is a partner in the Title Standard 58 pending the appeal of Massachusetts attorneys involved in of an Assignment of Mortgage executed Boston law firm the Ibanez and LaRace decisions. The conveyancing or mortgage foreclosures, as either prior, or subsequent, to foreclosure of Hemenway & SJC took these cases on direct appellate well as those employed as staff counsel or where said Mortgage has been foreclosed, Barnes LLP, where review. Earlier this year, the SJC affirmed underwriters by title insurance companies, of record, by the Assignee.”5 he serves as chair the decisions of the Land Court in a sin- of the Real Estate are all too familiar with the Supreme Judi- That all changed following the Land gle decision now commonly referred to Practice Group. He cial Court’s recent decisions in U.S. Bank Court’s decisions in Ibanez, LaRace and is also chair of the as Ibanez. Not surprisingly, paragraph 3 1 Nat’l Ass’n v. Ibanez and Bevilacqua v. Rosario, each of which presented slightly MBA Property Law Section Council. has now been permanently deleted from Rodriguez.2 The fallout from these deci- different facts. In Ibanez, the assignment REBA Title Standard 58. sions has created havoc for such practitio- of the mortgage was executed after the As a consequence of the SJC’s deci- ners. This article attempts to explain the foreclosure process was initiated.6 The holder of the mortgage at the time of the sion in Ibanez, a great number of foreclo- significance of these cases to the rest of us. same was true in LaRace, except that the foreclosure, as required under G.L. c. sures, perhaps thousands, are defective. Prior to the Land Court’s decisions in assignment contained language that pur- 183, Section 21, with which the courts This means that anyone buying a prop- Ibanez and the companion cases of Wells ported to make it effective prior to the have always required strict compliance.9 erty following such a defective foreclo- Fargo Bank Nat’l Ass’n v. LaRace3 and commencement of the foreclosure pro- The court found that the party foreclos- sure, either from the foreclosing entity LaSalle Bank Nat’l Ass’n v. Rosario,4 the ceedings.7 In Rosario, the assignment ing was not the holder of the mortgage or a subsequent purchaser, does not have timing of the signing or recording of an as- was executed prior to commencement in either Ibanez or LaRace, since no as- good title. While such a buyer’s pain may signment of a mortgage was generally not of the foreclosure, but not recorded until signment had been executed prior to com- be lessened somewhat by the existence of considered critical to the validity of a fore- afterwards.8 mencement of foreclosure.10 In Rosario, an owner’s title insurance policy issued closure by the assignee of the mortgage. The court found the foreclosures in on the other hand, the court upheld the pursuant to previous practice and former In fact, until recently, paragraph 3 of Ibanez and LaRace to be defective be- validity of the foreclosure, noting that the REBA Title Standard 58 and insuring that Real Estate Bar Association of Massa- cause the party foreclosing was not the mere failure to record an assignment prior the title is good, the pain still persists. to commencement of a foreclosure was Bevilacqua was one of these buyers. not the problem.11 In an attempt to clear his title of # 22 EXPERTS&RESOURCES CONTINUED FROM PAGE 18 EXPERT WITNESS FLORIDA PERSONAL INJURY INVESTIGATORS DICK ALBERT FLORIDA SIMMONS Meteorologist AGENCY, INC. CONSULTING AND ATTORNEY EXPERT WITNESS SERVICES Civil and Criminal Investigations Never again ad.pdf 3/16/06 12:47:01 PM LAW OFFICES OF Randy C. Botwinick ESTABLISHED 1935 Formerly of Pazer & Epstein • Asset locations • Backgrounds Concentrating in Personal Injury • Due diligence • 25 Years • Co-Counsel and Experience Participation Fees Paid • Probate MIAMI OFFICE PALM BEACH OFFICE • Proxy fights One Biscayne Place Peninsula Executive Center • Surveillance 1098 Biscayne Blvd. 2385 NW Executive Center Dr. Suite 405, Miami, FL 33131 Suite 100, Boca Raton, FL 33431 P: 305 895.5700 P: 561 995.5001 190 High Street F: 305 892.1107 F: 561 962.2710 Boston, MA 02110 Tel (617) 523-2288 [email protected] Toll FREE: 1-877-FLA-ATTY (352-2889) [email protected] TEL: 617-834-5615 www.personalinjurylawyer.ws www.simmonsagency.com LAWYER ASSISTANCE LAWYER ASSISTANCE Your law C practice advisor. M NEVER AGAIN WILL A LAWYER Assisting Massachusetts attorneys Y in establishing and institutionalizing CM professional office practices and HAVE TO SAY THERE WAS MY procedures to increase their ability CY to deliver high-quality legal services, NOWHERE TO TURN. CMY strengthen client relationships, and Rodney S. Dowell, Esq. K DIRECTOR, LOMAP enhance their quality of life. FREE CONFIDENTIAL PRACTICAL SOLUTIONS 617-482-9600 | www.lclma.org Law Office Management Assistance Program 888.545.6627 | 31 MILK STREET, SUITE 815, BOSTON, MA 02109 [email protected] | WWW.MASSLOMAP.ORG FUNDED BY LAWYERS CONCERNED FOR LAWYERS, INC. CONTINUED ON NEXT PAGE MASSACHUSETTS LAWYERS JOURNAL | JANUARY 2012 19 PROPERTY LAW EXPERTS&RESOURCES SJC rejects remedy CONTINUED FROM PAGE 19 for purchaser of invalidly MEDICAL foreclosed property Experienced YOUR Forensic Toxicologist AD • Analysis of JULIE TAYLOR MORAN JULIE TAYLOR MORAN, a founder and Results of Blood, NEEDS TO BE principal of Orlans Moran PLLC, is a Urine & Hair member of the Massachusetts Bankers’ Drug Tests; The recent decision of the Supreme Association, the Massachusetts Mortgage • Cocaine/ Judicial Court in Bevilacqua v. Rodri- Bankers’ Association Compliance Narcotics Issues: HERE. 1 guez has dealt another blow to purchas- Committee, the American Legal and • Possession vs. ers attempting to establish clear title to Financial Network and a founding member Personal Use property whose titles derive from fore- of Women Executives in Banking. She is • Dram Shop For all your closure sales deemed invalid as a result of on the Massachusetts Home Ownership & Vehicular advertising needs the SJC decision in U.S. Bank Nat’l Ass’ Advisory Committee and a volunteer Homicide References Available v. Ibanez.2 lecturer for Boston’s first-time home in the Massachusetts In Ibanez, issued in January 2011, buyers program. Medical & Law School Lawyers Journal, the SJC affirmed the Land Court’s hold- Teaching Experience – contact Mark Schultz. ing that a foreclosing lender must be the Excellent Communicator holder of the mortgage by an assignment affirmed the Land Court’s dismissal of the (617) 896-5323 dated before the first publication of the action while holding that the dismissal David M. Benjamin, Ph.D. mschultz@ sale.3 The decision, which repudiated should have been without prejudice to al- 617-969-1393 thewarrengroup.com the Real Estate Title Standard long re- low the plaintiff to pursue other judicial Email: [email protected] lied upon by real estate attorneys, which remedies.10 Website: www.doctorbenjamin.com recognized the validity of assignments of In its decision, the SJC systematically mortgage dated after the foreclosure sale, rejected various theories offered by Bevi- sent shock waves through the real estate lacqua to establish standing. He argued community. unsuccessfully that he was a bona fide PERSONAL INJURY A foreclosure which does not comply purchaser for value and that he held good with Ibanez is now in most cases consid- title by virtue of his recorded deed, a doc- ered invalid. Accordingly, any subsequent ument the SJC characterized as “mean- Experience ... Results attempted transfer of title to a purchaser ingless.”11 of that property by the foreclosing lender The court did suggest that under cer- is a nullity. The plaintiff in Bevilacqua tain circumstances, a defective foreclo- was faced with just this situation. sure deed could operate as an assignment In 2006, Bevilacqua purchased a of the mortgage.12 With this, the unfortu- foreclosed property from the foreclosing nate purchaser could attempt to clear title lender U.S. Bank, which was not holder by conducting his own foreclosure of the of the mortgage at the time of the foreclo- mortgage. There are inherent challenges sure sale.4 Bevilacqua proceeded to create to this type of remediation, including the four condominiums, three of which ap- risk to the purchaser (the foreclosing en- parently were sold before the Ibanez deci- tity) of being outbid at the auction by a sion. While the appeal of Ibanez was still third party, wiping out of the lien of the pending, Bevilacqua filed a try title action purchaser’s own purchase money mort- in the Land Court under G.L. c. 240, §§ gage as a result of the new foreclosure PERSONAL INJURY AND MEDICAL MALPRACTICE REFERRALS WELCOMED 1-5.5 He argued he was the party in pos- sale and issues of priority of other record- session and holder of record title, there- ed liens on the property. fore according him the requisite stand- These efforts could become even more Breakstone | White |Gluck ing to compel the respondent, the former complicated, depending on the outcome mortgagor, to either bring an action to try of the pending appeal in Eaton v. Fed. title or be forever barred from enforcing Nat’l Mortg. Ass’n,13 a recently decided 2 Center Plaza, Suite 530, Boston, MA 02108 his adverse claim to the property.6 case in which the court held that the fore- (617) 723-7676 | www.bwglaw.com The former mortgagor could not be closing entity must hold both the note and found and did not appear in the case.7 mortgage.