Homeowner’s “Novel” Claim Allowed to Proceed in Foreclosure Defense Lawsuit

The Federal District Court in Boston recently allowed a homeowner’s foreclosure defense lawsuit to continue in light of a “novel” claim they had argued. The theory appears to be the first of its kind, and may have a wide-ranging impact in future cases brought by other homeowners.

The theory is actually quite simple. Before a foreclosure sale can be scheduled, Massachusetts law requires that an affidavit be recorded at the local registry of deeds confirming whether state foreclosure laws have been complied with. In this case, it appears that an affidavit was filed at the correct registry of deeds, but it was filed by a third-party agent under a power of attorney. Proof of that power of attorney, however, was not recorded at the local registry of deeds.

The homeowner argued that under applicable real estate laws, the power of attorney must have been recorded at the local registry of deeds. Because it wasn’t, the homeowner argued that the bank lacked standing to foreclose.

The Court ultimately determined that this is a viable claim, and denied the bank’s motion for judgment on the pleadings. While acknowledging that it is a novel claim, the Court stated: “Nevertheless, defendant has failed to meet its burden of showing that such a novel claim is futile. Accepting plaintiff’s allegations as true, it is plausible that defendant improperly recorded its power of attorney, stripping it of standing to foreclose. Accordingly, Count IV of the Second Amended Complaint states a viable claim.”

A complete copy of the opinion is available online as Afridi v. Residential Credit Solutions, Inc.

What You Should Know for Your Case

If you are facing foreclosure, it is important to bring claims like this as soon as possible. The Supreme Judicial Court has previously acknowledged that, in some circumstances, an issue like this might deprive the bank of standing to foreclose, but it may not be enough to undo a foreclosure that has already been completed.

Brine Consumer Law represents real people like you in foreclosure defense lawsuits, as well as bankruptcy cases intended to prevent foreclosure. If you are facing foreclosure, please contact Brine Consumer Law today for a free consultation.

 

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