A lawyer for U.S. Bank argued in Supreme Judicial Court in Boston today that a judge erred in ruling certain foreclosures, including one in the controversial Ibanez case, were invalid.
In defense, R. Bruce Allensworth upheld his argument that U.S Bank had every legal right to proceed with the foreclosure of the Springfield property.
This morning, U.S. Bank contended they completed the foreclosure through a mortgage schedule and with collateral files produced for the loan.
Lawyers for primary plantiff Antonio Ibanez disagreed, telling the court that everything U.S. Bank said was untrue, and the bank had little right to foreclose on a Springfield property.
Boston attorney Paul R. Collier, who represented Ibanez, argued there was no way U.S. Bank could legally document its ownership of properties, and therefore its right to foreclose.
"There is no assignment anywhere in the world to show for when the foreclosure took place," said Collier.
Last March, in U.S. Bank v. Ibanez and Wells Fargo v. LaRace, Judge Keith Long of the Massachusetts Land Court ruled in Hampden County Land Court that certain foreclosures were invalid because the foreclosing institutions could not prove they owned the property at the time of the foreclosure auction.
If the court rules in favor of Ibanez, there is the possibility that thousands of foreclosures may be invalidated if proper title and ownership could not be verified at the time of foreclosure. It will then be up to the court to decide how to handle the buyers of foreclosed homes. It is expected that the court will deliberate between making a retroactive decision mandating proof of ownership in all prior foreclosures, or a prospective decision that would clear past foreclosures by ensure future proceedings are properly documented.
Glenn S. Russell Jr., who represented plaintiffas Mark A. and Tammy L. LaRace, suggested actions should be taken against the bank’s title insurer, and that former homeowners should not bear cost.
Prior to the Long’s Ibanez decision, many lenders had gotten into the habit of not recording mortgage assignments in a timely manner, or only recording them after a foreclosure, to clean up the title. In the overheated mortgage market of the last few years, mortgages were routinely passed from lender to lender and many buyers were foreclosed upon for unpaid mortgages by lenders that didn’t have assignment at the time of foreclosure.
Banker & Tradesman Staff Writer Michelle Laczkoski contributed to this report.
