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Legal Insider - Foreclosure? Are You Sure?


Atty. Richard M. Kallman


While most prospective purchasers of foreclosed properties or current owners of properties that were foreclosed upon in the last few years may be aware that the federal government has pressured lenders to slow down their pending foreclosures to be sure they are following the legal requirements of the states where the properties are located, most people don't realize the severity of the foreclosure crisis that is currently developing.  A ruling by the Massachusetts Supreme Judicial Court (Ibanez vs. USBancorp.) just a few weeks ago will result in the complete invalidation of many of the 44,000 foreclosures conducted in Massachusetts since 2005.  Boston Globe reports. The Supreme Court upheld a decision by the Massachusetts Land Court that invalidated two foreclosures because neither Wells Fargo nor US Bank were the record holders of the mortgages at the time they conducted foreclosures on residential homes in Springfield, Massachusetts. OOPS!   The effect of this decision is that the homeowners who subsequently purchased those properties from Wells and US Bank do not have good and marketable title to those properties.  Unfortunately, the procedures followed by US Bank and Wells Fargo were commonplace by many foreclosing lenders over the last several years. YIKES! In those cases similar to Ibanez, homeowners will be unable to sell or refinance their homes until there is a resolution proposed by the judicial system or the legislature. Secretary of State William Galvin seeks to ease the uncertainty following the SJC ruling.

For those of you who own a home that was foreclosed upon since 2005, I urge you to consult with an experienced real estate attorney to determine if you have good title to your home.  And for those of you considering making an offer to purchase a home that was foreclosed upon, you should consider seeking the advice of legal counsel before you even make an offer.  At a minimum, your offer should contain the right to conduct a title examination prior to signing a purchase and sale agreement just as you would obtain a home inspection.  Prospective buyers and sellers need to determine at the start of the home buying process whether the current owner has the ability to sell the home.  Failure to conduct a thorough title examination and have it reviewed by an experienced real estate attorney could result in wasted time and money being spent by both parties before a defect in the foreclosure process is discovered just prior to closing.

The effects of the Ibanez decision are far reaching and title to any home foreclosed in the last several years is suspect.  Do your due diligence before making an offer or listing a home that was foreclosed.

Legal Insider Content Contributed by Attorney Richard M. Kallman. Contact Atty. Kallman at 978-356-2934 or

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