SJC expands right to challenge bank seizures

Mattapan man’s objection that he wasn’t told of sale goes back to housing court

August 05, 2011|By Jenifer B. McKim, Globe Staff

KC Bailey hopes he can now find a way to save his home. (Kayana Szymczak for the…)

The state’s highest court has ruled that people fighting eviction from homes they lost to foreclosure can challenge the validity of a property seizure in housing court after the fact, a decision that housing rights advocates are calling a major victory.

The Massachusetts Supreme Judicial Court’s unanimous ruling, released yesterday, involved KC Bailey of Mattapan, whose home was taken back by his lender through foreclosure in 2007. Two years later, Bailey, 65, contested his impending eviction during a housing court proceeding, saying the foreclosure process was flawed.

Bailey claimed he learned of the foreclosure only after finding an eviction notice taped to a fence surrounding his three-bedroom Colonial, which had been in his family since 1979. The Vietnam veteran said he refused to leave because he was not given proper notice of the sale and is still living there.

Bank of New York, which set out to evict Bailey, argued that the housing court didn’t have the authority to consider a challenge to a foreclosure already finalized, and the judge agreed. Bailey appealed and the Supreme Judicial Court decided to take the case. It now goes back to housing court.

The decision was hailed by local housing rights advocates, who said it will force lenders to prove they legally own a property before evicting occupants, and will lead to more negotiations with financially-distressed borrowers seeking to save their homes.

Bank of New York Mellon Corp. officials said yesterday they were still reviewing the decision but emphasized that the bank is a trustee in the matter and thus has a “very limited ministerial role.’’

Because Massachusetts doesn’t require courts to sign off on foreclosures, the eviction process can be the first opportunity for a former homeowner to contest a property seizure in court. The ruling also will provide a new legal tool to tenants fighting evictions from foreclosed homes, housing attorneys said.

“This decision ensures that if a bank is going to walk into court and try to evict a homeowner, it has to prove there has been a valid foreclosure,’’ said Esme Caramello, deputy director of the Harvard Legal Aid Bureau, a branch of Harvard Law School that provides free representation to low-income clients and represented Bailey.

Melonie Griffiths, a community activist with City Life/Vida Urbana, a Jamaica Plain nonprofit that works for the rights of tenants and homeowners, said the ruling will motivate lenders to help homeowners renegotiate their loans to manageable levels.

“By holding the banks more accountable, many folks will stay in their homes,’’ Griffiths said.

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