JOSE B. PEREIRA vs. PASQUALE POLITANO and another [Note 1]

KARSTETTER, J. Jose B. Pereira ("Pereira") purchased real property at a foreclosure sale in August, 2013 and sought to take possession. The former owners of the property, the Politanos, [Note 2] claimed that the foreclosure was invalid since the terms of their mortgage had not been strictly followed. In Pereira's postforeclosure summary process action, the trial court found that the Politanos had cured the default for which notice and a right to cure had been given and that they were therefore entitled to a second notice and right to cure under the terms of paragraph 22 of their mortgage, the provisions of G.L. c. 244, § 35A notwithstanding, and granted summary judgment for them. Because the provisions of the mortgage were not strictly adhered to, the foreclosure was invalid and the Politanos had superior title and the right to possession. We affirm.

Background facts. On May 26, 2004, the Politanos granted a mortgage on the property at 50 Fiske Street, Revere to East Boston Savings Bank (the "Bank") to secure a loan. Paragraph 22 of the mortgage required the Bank to send a notice of default "prior to acceleration following Borrower's breach of any covenant or agreement." The notice was required to specify the default, the action required to cure the default, and a date not less than thirty days from the date of the notice by which the default must be cured. If the default remained on the date specified in the notice, the Bank could require immediate payment in full of all sums secured by the mortgage without further demand and could "invoke the STATUTORY POWER OF SALE and any other remedies permitted by Applicable Law." [Note 3]

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On May 12, 2008, the Bank sent the Politanos a notice of default and right to cure. The notice included a delinquency amount due of $2,972.74 and the requirement that they pay additional fees and costs that would become due in the interim. The date by which the Politanos had to cure the default was August 12, 2008. The evidence before the motion judge regarding whether the Politanos had cured the default was a "Loan Transaction History" or payment ledger from the Bank. [Note 4] The Politanos, according to the ledger, made payments totaling an amount greater than the delinquency before the August 12th due date. [Note 5] Pereira offered no affidavit or other evidence to contradict the payments reflected in ledger. The motion judge's view of the payment history was that the Politanos had timely cured the delinquency; Pereira offered no alternative view. [Note 6]

The Bank sent the Politanos no additional notices of default and right to cure between May, 2008 and August, 2013, though it is undisputed that the Politanos were in default at the time that the Bank accelerated the mortgage and invoked the statutory power of sale pursuant to G.L. c. 183, § 21 ("§ 21"). Foreclosure proceedings

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commenced within five years of the 2008 notice of default, and on August 20, 2013, the Bank held a foreclosure auction. Pereira purchased the property for $220,000.00.

Discussion. Strict compliance with the notice of default provisions in paragraph 22 of the mortgage is required as a condition of a valid foreclosure sale. Pinti v. Emigrant Mtge. Co., 472 Mass. 226, 227 (2015). And as the Court noted in Pinti, § 21 expressly requires "that to effectuate a valid foreclosure sale pursuant to a power of sale, the mortgagee must 'first comply[] with the terms of the mortgage and with the statutes relating to the foreclosure of mortgages by the exercise of a power of sale.'" Id. at 232, quoting G.L. c. 183, § 21.

The rationale for strict compliance is plain: because the statutory scheme grants the power to foreclose without judicial oversight, the exercise of that power must be "carefully watched . . . with careful regard to the interests of the mortgagor." Id. at 233, quoting Pryor v. Baker, 133 Mass. 459, 460 (1882). "Recognizing the substantial power that the statutory scheme affords to a mortgage holder to foreclose without immediate judicial oversight, we adhere to the familiar rule that 'one who sells under a power [of sale] must follow strictly its terms. If he fails to do so there is no valid execution of the power, and the sale is wholly void.'" U.S. Bank Nat'l Ass'n v. Ibanez, 458 Mass. 637, 646 (2011), quoting Moore v. Dick, 187 Mass. 207, 211 (1905). "Nothing in the language or history of § 21 suggests that the Legislature intended the statute to disavow or alter this court's rulings that mortgage terms associated with the power of sale must be followed strictly." Pinti, supra at 235.

The ruling in Pinti applies to the foreclosure of the Politanos' mortgage. Federal Nat'l Mtge. Ass'n v. Marroquin, 477 Mass. 82, 88 (2017) (Pinti ruling should be applied "to cases pending in the trial court where the Pinti issue was timely and fairly raised before [the Supreme Judicial Court] issued [its] decision in Pinti"); Aurora Loan Servs., LLC v. Murphy, 88 Mass. App. Ct. 726, 732 (2015).

Insofar as the Politanos mortgage is concerned, paragraph 22 requires notice of default to be given prior to any acceleration of the sums secured by the mortgage along with the prescription that it contain the right, and the means by which, to cure that default. The power of sale may not be invoked if the default is cured within the time specified in the notice of default. The Bank did not comply with paragraph 22 of the Politanos' mortgage because the Politanos cured the prior default; a second notice was therefore required.

Pereira's reliance on G.L. c. 244, § 35A, which requires one notice of default (and one right to cure period) during a five-year time period, [Note 7] is misplaced. "The fact that § 21 does not incorporate § 35A into the fixed set of foreclosure sale statutes demanding strict compliance does not mean that strict compliance with the notice provisions in paragraph 22 is not required." Pinti, supra at 240. The requirements of the mortgage and the statutes relating to foreclosure by power of sale are "separately grounded and [have] an independent meaning." Id. The fact that the Politanos' post-2008-cure default was within five years of the May, 2008 notice is therefore of no significance because the Bank did not comply with paragraph 22 of the mortgage. The Politanos were entitled to a second default notice and cure period where their mortgage

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required it. Where a default has been cured, as here, the Bank must send a new notice and give the mortgagor an opportunity to cure his new default.

Where a foreclosure is void, it is "a nullity such that title never left possession of the original owner" and a third-party purchaser cannot claim valid title. Bevilacqua v. Rodriguez, 460 Mass. 762, 778 (2011); McGreevey v. Charlestown Five Cents Sav. Bank, 294 Mass. 480, 484 (1936); Roarty v. Mitchell, 73 Mass. 243, 244 (1856). "A purchaser under a power of sale must see to it at his peril that there has been a compliance with the legal and essential terms of the power. If there has not been, then he is not protected, whether acting in good faith or not." Moore, supra at 212. Title never left the Politanos; despite being a bona fide purchaser, Pereira does not have title and cannot, therefore, be awarded possession.

Judgment affirmed.

So ordered.