The recent decision of the Supreme Judicial Court in
Bevilacqua v. Rodriguez1 has dealt another blow
to purchasers attempting to establish clear title to property whose
titles derive from foreclosure sales deemed invalid as a result of
the SJC decision in U.S. Bank Nat'l Ass' v.
In Ibanez, issued in January 2011, the SJC affirmed the
Land Court's holding that a foreclosing lender must be the holder
of the mortgage by an assignment dated before the first
publication of the sale.3 The decision, which repudiated
the Real Estate Title Standard long relied upon by real estate
attorneys, which recognized the validity of assignments of mortgage
dated after the foreclosure sale, sent shock waves through the real
A foreclosure which does not comply with Ibanez is now in
most cases considered invalid. Accordingly, any subsequent
attempted transfer of title to a purchaser of that property by the
foreclosing lender is a nullity. The plaintiff in
Bevilacqua was faced with just this situation.
In 2006, Bevilacqua purchased a foreclosed property from the
foreclosing lender U.S. Bank, which was not holder of the mortgage
at the time of the foreclosure sale.4 Bevilacqua
proceeded to create four condominiums, three of which apparently
were sold before the Ibanez decision. While the appeal of
Ibanez was still pending, Bevilacqua filed a try title
action in the Land Court under G.L. c. 240, §§ 1-5.5 He
argued he was the party in possession and holder of record title,
therefore according him the requisite standing to compel the
respondent, the former mortgagor, to either bring an action to try
title or be forever barred from enforcing his adverse claim to the
The former mortgagor could not be found and did not appear in the
case.7 Nonetheless, Judge Lang, the same judge who had
decided the Ibanez case, on his own initiative, raised the
issue of the validity of the plaintiff's record title and
therefore, his standing to maintain the action.8 He
determined, based on Ibanez, that Bevilacqua did not hold
title to the property and dismissed the case with
prejudice.9 Bevilacqua appealed. The SJC affirmed the
Land Court's dismissal of the action while holding that the
dismissal should have been without prejudice to allow the
plaintiff to pursue other judicial remedies.10
In its decision, the SJC systematically rejected various theories
offered by Bevilacqua to establish standing. He argued
unsuccessfully that he was a bona fide purchaser for value and that
he held good title by virtue of his recorded deed, a document the
SJC characterized as "meaningless."11
The court did suggest that under certain circumstances, a
defective foreclosure deed could operate as an assignment of the
mortgage.12 With this, the unfortunate purchaser could
attempt to clear title by conducting his own foreclosure of the
mortgage. There are inherent challenges to this type of
remediation, including the risk to the purchaser (the foreclosing
entity) of being outbid at the auction by a third party, wiping out
of the lien of the purchaser's own purchase money mortgage as a
result of the new foreclosure sale and issues of priority of other
recorded liens on the property.
These efforts could become even more complicated, depending on the
outcome of the pending appeal in Eaton v. Fed. Nat'l Mortg.
Ass'n,13 a recently decided case in which the court
held that the foreclosing entity must hold both the note and
mortgage. The purchaser could consider contacting the former
mortgagor (owner) to obtain a deed in lieu of foreclosure, provided
there are no subordinate liens on the property, or alternatively,
rely on the entry made under G.L. c. 244§§1-2, either at the
original foreclosure sale, or at some point thereafter which
resolves title three years after recordation of the certificate of
Julie Taylor Moran, a founder and principal of Orlans
Moran PLLC, is a member of the Massachusetts Bankers' Association,
the Massachusetts Mortgage Bankers' Association Compliance
Committee, the American Legal and Financial Network and a founding
member of Women Executives in Banking. She is on the Massachusetts
Home Ownership Advisory Committee and a volunteer lecturer for
Boston's first-time home buyers program.
1460 Mass.762 (2011).
2458 Mass.637 (2011).
3Id. at 650.
4Bevilacqua, 460 Mass. at 765.
6Id. at 763.
11Id. at 772.
12Id. at 773.
13SJC 11041 (Mass. filed Sept. 6, 2011).