Massachusetts attorneys involved in conveyancing or mortgage
foreclosures, as well as those employed as staff counsel or
underwriters by title insurance companies, are all too familiar
with the Supreme Judicial Court's recent decisions in U.S. Bank
Nat'l Ass'n v. Ibanez1 and Bevilacqua v.
Rodriguez.2 The fallout from these decisions has
created havoc for such practitioners. This article attempts to
explain the significance of these cases to the rest of us.
Prior to the Land Court's decisions in Ibanez and the
companion cases of Wells Fargo Bank Nat'l Ass'n v.
LaRace3 and LaSalle Bank Nat'l Ass'n v.
Rosario,4 the timing of the signing or recording of
an assignment of a mortgage was generally not considered critical
to the validity of a foreclosure by the assignee of the
In fact, until recently, paragraph 3 of Real Estate Bar
Association of Massachusetts (REBA) Title Standard 58, as adopted
in 1995, provided that a title is not defective by reason of "[T]he
recording of an Assignment of Mortgage executed either prior, or
subsequent, to foreclosure where said Mortgage has been foreclosed,
of record, by the Assignee."5
That all changed following the Land Court's decisions in
Ibanez, LaRace and Rosario, each of
which presented slightly different facts. In Ibanez, the
assignment of the mortgage was executed after the foreclosure
process was initiated.6 The same was true in
LaRace, except that the assignment contained language that
purported to make it effective prior to the commencement of the
foreclosure proceedings.7 In Rosario, the
assignment was executed prior to commencement of the foreclosure,
but not recorded until afterwards.8
The court found the foreclosures in Ibanez and
LaRace to be defective because the party foreclosing was
not the holder of the mortgage at the time of the foreclosure, as
required under G.L. c. 183, Section 21, with which the courts have
always required strict compliance.9 The court found that
the party foreclosing was not the holder of the mortgage in either
Ibanez or LaRace, since no assignment had been
executed prior to commencement of foreclosure.l0 In
Rosario, on the other hand, the court upheld the validity
of the foreclosure, noting that the mere failure to record an
assignment prior to commencement of a foreclosure was not the
Following these decisions by the Land Court, REBA suspended
paragraph 3 of Title Standard 58 pending the appeal of the
Ibanez and LaRace decisions. The SJC took these
cases on direct appellate review. Earlier this year, the SJC
affirmed the decisions of the Land Court in a single decision now
commonly referred to as Ibanez. Not surprisingly,
paragraph 3 has now been permanently deleted from REBA Title
As a consequence of the SJC's decision in Ibanez, a great
number of foreclosures, perhaps thousands, are defective. This
means that anyone buying a property following such a defective
foreclosure, either from the foreclosing entity or a subsequent
purchaser, does not have good title. While such a buyer's pain may
be lessened somewhat by the existence of an owner's title insurance
policy issued pursuant to previous practice and former REBA Title
Standard 58 and insuring that the title is good, the pain still
Bevilacqua was one of these buyers. In an attempt to clear his
title of this Ibanez problem, Bevilacqua brought a "try
title" action under G.L. c. 240, §§ 1-5 in the Land
Court.l2 Such a proceeding allows a property owner to
compel anyone with an adverse claim on his title to come forward
and prove the case, or be forever barred from asserting such claim.
The conveyancing and foreclosure bars, as well as the title
companies, were hopeful that this would provide a way of
rehabilitating foreclosures defective under Ibanez. Had
Bevilacqua succeeded, the try title action would likely have become
the most expedient way to fix an Ibanez problem.
Unfortunately for Bevilacqua and others similarly situated, the
SJC held that a try title action requires the plaintiff to have
record title.l3 In Bevilacqua, since the
mortgage had not yet been assigned to the foreclosing party at the
time of the foreclosure, it did not have good title, and hence,
Bevilacqua did not have record title and he could not avail himself
of the try title procedure.l4
Where does this leave Bevilacqua and other property owners with an
Ibanez problem? The most obvious solution would be for the
foreclosing entities to re-foreclose. The problem with this
approach is that it requires repeating the foreclosure process,
including all required notices and conducting a new sale. Under
such a scenario, the current "owner" would face the possibility of
being outbid at the auction sale. Any such foreclosures would also
likely be subject to recently enacted moratorium legislation
dramatically delaying the foreclosure process, even though such
legislation was not aimed at foreclosures brought under these
A second approach would be to conduct a new foreclosure by entry,
a process which commonly accompanies a foreclosure by power of sale
as part of a "belt and suspenders" approach. The problem with this
alternative is that it takes three years for a foreclosure by entry
to become effective. This will not help an "owner" who desires to
sell or refinance his property in the meantime.
This situation has created a real dilemma, not only for the
lenders and buyers of foreclosed property, but also for the title
insurance companies. Rather than waiting for the thousands of
claims that will inevitably be asserted, the title insurance
industry has tried to be proactive. Reviewing all existing title
insurance policies to locate each one with an Ibanez
problem is a daunting task, and as set forth above, the only
obvious remedy, re-foreclosure, is not particularly attractive.
Instead, the title insurers are wisely seeking a legislative
Legislation has recently been filed on behalf of the Massachusetts
Land Title Association. Senate Bill 830, entitled "An Act Clearing
Titles to Foreclosed Properties" provides that once the affidavit
(required under G.L. c. 244, Section 15, in connection with the
foreclosure of a mortgage) has been recorded, the former owner has
90 days to bring an action in the Superior Court challenging the
right of the foreclosing entity to foreclose.
If the former owner fails to do so, the affidavit shall be deemed
to be conclusive evidence in favor of a good faith purchaser for
value at or subsequent to the foreclosure sale that the foreclosing
party identified in the affidavit is in fact the holder of the
This would fix the Ibanez problem without the need to
re-foreclose or to bring a court action. For the sake of all
innocent buyers of properties following foreclosures defective
under Ibanez, let us hope that the Legislature will pass
this or similar legislation soon. Stay tuned.
Thomas L. Guidi is a partner in the Boston law firm of
Hemenway & Barnes LLP, where he serves as chair of the Real
Estate Practice Group. He is also chair of the MBA Property Law
l458 Mass. 637 (2011).
2460 Mass. 762 (2011).
32009 WL 795201 (Mass. Land Ct. Mar. 26, 2009).
5REAL ESTATE BAR ASSOCIATION Title Standard 58, ¶ 3
6Ibanez, 458 Mass. at 643.
7Id. at 645.
8Rosario, 2009 WL 795204, at *2.
9Ibanez, 458 Mass. at 653.
l0Rosario, 2009 WL 795204, at *2.
l2Bevilacqua, 460 Mass. at 765.
13Id. at 780.
l4Id at 772.