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Saturday, May 25, 2024 | Back issues
Courthouse News Service Courthouse News Service

Ruling From State’s Highest Court Puts Thousands of Foreclosure Sales Into Question

BOSTON (CN) - The Massachusetts housing market has been thrown for a loop by a Supreme Judicial Court ruling that a man who bought a property improperly foreclosed upon by U.S. Bancorp has no right to the property. The Massachusetts Supreme Judicial Court is the state's highest court.

Francis Bevilacqua sued the former property owner to try to clear up the clouded title, but the Supreme Judicial Court ruled that because U.S. Bancorp foreclosed on the home one month before it was legally entitled to do so, "the intention of U.S. Bank to transfer the property to Bevilacqua is irrelevant and he cannot have become owner of the property."

Bevilacqua's complaint, based largely on the possibility of an adverse claim by the previous owner, was dismissed by a Land Court judge, and his appeal was denied because "the very fact that raises the possibility of an adverse claim - U.S. Bank's lack of authority to foreclose at the time it purported to foreclose - is fatal to Bevilacqua's claim to 'own' the property," the Supreme Judicial Court ruled.

Bevilacqua claimed he was unaware of any title problems when he bought the property, and that "as a result he must be permitted to proceed under the try title statute or be left without an adequate remedy."

But the Supreme Judicial Court ruled that, based on the documents for the property, "Bevilacqua must have attempted to purchase the property from U.S. Bank ... either when the registry's records showed the bank to be a complete stranger to title, when the registry's records showed the bank to be no more than an assignee of the mortgage, or when the registry's records showed that the bank conducted the foreclosure sale before receiving assignment of the mortgage. In none of these circumstances could we conclude that Bevilacqua is a bona fide purchaser for value and without notice that U.S. Bank's title was doubtful."

The ruling could jeopardize the titles of hundreds or thousands of homeowners who bought foreclosed homes since the financial crisis, sparked by the mortgage securities crisis, began 4 years ago.

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