This is the second ruling in less than a year in which the Massachusetts Supreme Judicial Court has tried to sort out the mess created by the rapid-fire foreclosure of thousands of properties after the housing market’s collapse. During that time, some lenders seized and then resold homes before establishing a clear record of ownership. Last winter, the high court upheld a contentious ruling from the Massachusetts Land Court that challenged how banks had traditionally seized properties without having all the necessary paperwork.
In that case the high court overturned foreclosures of two properties in Springfield by U.S. Bancorp and Wells Fargo after the banks could not prove they owned the mortgages they foreclosed on.
Yesterday’s decision was a follow-up to that ruling. The case was brought by developer Francis J. Bevilacqua, who in 2006 bought a building in Haverhill from a trust for which U.S. Bank National Association, a unit of U.S. Bancorp, is trustee. Earlier in 2006 the trust had prematurely seized the property from the prior owner, acting about one month before the mortgage lender appointed it to do so.
With that cloud hanging over the foreclosure, Bevilacqua sought to clear any doubt that he was the legal owner by bringing a case against the former holder of the property. The high court ruled the earlier improper transfer of the property left him with no standing as an owner.
U.S. Bank had no comment, noting that, as trustee, it was not a party to the case.
The court’s decision could have major repercussions because it raises the specter that anyone else who purchased foreclosed homes with questionable paperwork may not actually own those properties. The court did not address who does own the Haverhill property, if not Bevilacqua.
