Bay State Foreclosures Rise but a New Court Ruling Looms
Foreclosure filings rose in Massachusetts in April, according to the Boston Globe (“ Foreclosure petitions rise for 2d month,” by Jenifer B. McKim). But the statistics are mixed, the Globe reported: “Even as petitions rise, foreclosure deeds — indicating a completed home seizure — fell last month. There were 518 in April, a 6.2 percent decline from March and a 62.3 percent slide from the 1,375 recorded in April 2010. Through the first four months of 2011, there have been 2,111 deeds recorded, a 56.2 percent decrease from January through April of last year.” Legal issues as well as economic conditions are having an effect on foreclosure activity in the state. A Massachusetts Supreme Judicial Court ruling in January voided the foreclosure on two homes because of improper paperwork on the part of the foreclosing banks. Now, the state’s high court is deliberating on another case where clear title is an issue in a foreclosure situation, as Reuters reported on May 2 (“ Mass high court wades back into foreclosure mess,” by Ross Kerber). The current case, Bevilacqua v. Rodriguez, grows out of the case decided in January, reports HousingWire (“ Massachusetts case pits current owner against former parties to foreclosure,” by Kerri Panchuk). Bevilacqua acquired a foreclosed home from U.S. Bank in a foreclosure sale in 2006, but a court has found that U.S. Bank did not have a clear mortgage assignment for the house in question when the bank passed ownership along to Bevilacqua. Now the issue is whether Bevilacqua has standing to sue in court to have his title cleared. The outcome could have a profound effect on the market for foreclosed homes: If innocent third parties can’t rely on having full legal ownership of a house they purchase from a foreclosing bank, stalled foreclosures and sales could persist for years as a drag on the housing economy.