The Supreme Court in Massachusetts ruled that a home owner who had purchase a home in foreclosure did not have legal ownership of the property because the bank failed to properly process the title when originally foreclosing on it.
“The decision by the Supreme Judicial Court casts a cloud over the legal ownership of any properties in Massachusetts where banks didn't properly convey title when foreclosing,” The Wall Street Journal notes in an article about the case. “The problem has gained attention nationwide because of banks' use of ‘robo-signing’ and other dubious practices that may have broken chains of title on foreclosures.”
The court’s ruling follows on the heels of an earlier court decision that had voided a foreclosure after banks couldn’t prove they owned the mortgage when it started the foreclosure process. The most recent “ruling took that decision one step further by finding that sales of bank-owned properties with clouded title were invalid, even after an unwitting third-party buyer later bought the bank-owned property,” The Wall Street Journal notes.
The case centered on a home purchase by Francis Bevilacquain 2006 of a foreclosure in Haverhill, Mass.
Any home owner who bought a home with a "tainted foreclosure in their chain [of title] is going to have to do something to give clean title" whenever selling or refinancing the home, Jeffrey Loeb, Bevilacqua’s attorney, told The Wall Street Journal. "That's actually what's scary. Most people don't know they have this problem."
Daily Real Estate News | Wednesday, October 19, 2011
Source: “State Rules on Foreclosure,” The Wall Street Journal (Oct. 19, 2011
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