Petitioners Heather J. Campbell and Barbara L. Campbell (Petitioners), filed their unverified Petition to Try Title on August 17, 2012, pursuant to G. L. c. 240, §§ 1-5, asserting that a foreclosure sale (the Foreclosure Sale) held at property located at 66 New Ludlow Road, Chicopee, MA 01020 (Locus) was invalid. [Note 1] On August 29, 2012, Petitioners filed their First Amended Petition to Try Title to include numerous facts supporting the allegations regarding the invalidity of the Foreclosure Sale. On October 15, 2012, Respondent Bank of America, N.A. (Bank of America), as successor in interest to BAC Home Loan Servicing, LP (BAC), filed its Answer, Affirmative Defenses, and Counterclaim alleging an action to try title. On October 25, 2012, Respondent Federal National Mortgage Association (FNMA) filed its Answer, Affirmative Defenses, and Counterclaim alleging an action to try title. On October 26, 2012, Respondent Mortgage Electronic Registration Systems, Inc. (MERS) filed its Answer, Affirmative Defenses, and Counterclaim alleging an action to try title. On October 29, 2012, Petitioners filed their Answer and Affirmative Defenses to Bank of Americas Counterclaim. On November 16, 2012, Petitioners filed their Answer and Affirmative Defenses to MERS Counterclaim and FNMAs Counterclaim.
Petitioners filed their Second Amended Petition to Try Title on December 19, 2012, contending that an assignment of the mortgage [Note 2] was invalid for multiple reasons; that the Foreclosure Sale was invalid because Bank of America did not hold the note [Note 3] or the mortgage [Note 4] at the time of the Foreclosure Sale, and because Respondents did not comply with statutory and contractual requirements [Note 5] leading up to the Foreclosure Sale; and that the foreclosure deed to FNMA [Note 6] was consequently rendered void. On January 22, 2013, Bank of America, MERS, and FNMA separately filed their Amended Answers, Affirmative Defenses, and Counterclaims.
On February 28, 2014, FNMA filed a Motion for Summary Judgment, together with supporting memorandum, Statement of Material Facts, and affidavit of Steven Manchini. [Note 7] On April 23, 2015, FNMA filed its Supplemental BriefMotion to Dismiss or for Summary Judgment, which replaced its initial Motion for Summary Judgment and highlighted intervening case law issued by the Supreme Judicial Court (SJC) in Abate v. Fremont Investment & Loan, 470 Mass. 821 (2015). The next day, on April 24, 2015, Bank of America filed its Motion to Dismiss and/or for Summary Judgment together with supporting memorandum, Statement of Relevant Facts, Appendix of Authorities, and Affidavit of Michael Sexton (Sexton Affidavit). On June 9, 2015, a Disclaimer of Interest by MERS and a Joint Stipulation Between the Petitioners and MERS to be Made an Order of the Court was filed, dismissing MERSs counterclaims against Petitioners, and stating that Petitioners will not seek a decree from the court to compel MERS to bring an action to try title or take further action against MERS in this proceeding.
On July 7, 2015, Petitioners filed their Oppositionto Respondents Motions to Dismiss and/or for Summary Judgment, together with supporting memorandum, and Statement of Additional Material Facts. A hearing was held on July 8, 2015, at which time Bank of America and FNMA filed a Motion to Strike Petitioners Opposition and for Sanctions due to Petitioners late filing. After discussion and agreement with the parties, the Court allowed the Motion for Sanctions and ordered Petitioners to pay FNMA the sum of $1,075 for legal fees and to pay Bank of America the sum of $875 for legal fees, all to be paid on or before July 28, 2015. As a result, the Court continued the Summary Judgment hearing to July 28, 2015 and permitted Respondents more time to file their respective Reply Briefs. FNMA filed its Response to Petitioners Statement of Additional Material Facts and its Reply Brief on July 23, 2015. Bank of America filed its Reply Brief on July 24, 2015. A second hearing was held on July 28, 2015, and at that time the matter was taken under advisement.
The court has issued a decision (the Decision) as of todays date. In accordance with the Decision, it is hereby:
ORDERED and ADJUDGED that Respondents are not barred from bringing their Rule 12(b)(1) motions challenging Petitioners standing to maintain this try title action; and
ORDERED and ADJUDGED that the Assignment validly transferred the Mortgage from MERS to BAC (later succeeded by Bank of America by merger), and that Bank of America properly held the Mortgage at the time of the Foreclosure Sale; and
ORDERED and ADJUDGED that because the alleged defects in the notices provided in the June 2008 Letter cannot render the Foreclosure Sale invalid under G.L. c. 244, § 35A, they also do not provide a basis to void FNMAs Foreclosure Deed under G.L. c. 244, § 35A; and
ORDERED and ADJUDGED that Petitioners argument that the Foreclosure Deed is void ab initio because the language in the June 2008 Letter did not strictly comply with the pre-foreclosure notice language of Paragraph 22 cannot stand in light of the prospective application of the holding in Pinti v. Emigrant Mortgage Co., Inc., 472 Mass. 226 (2015); and
ORDERED and ADJUDGED that the Foreclosure Sale of Locus was valid, and that FNMA properly holds record title to Locus by virtue of the Foreclosure Deed; and
ORDERED and ADJUDGED that Petitioners do not have superior record title to Locus and therefore do not have standing to maintain this try title action; and
ORDERED and ADJUDGED that Respondents Motions to Dismiss are hereby ALLOWED; and
ORDERED and ADJUDGED that because a Judgment of Dismissalas to Petitioners claims in the Complaint obviates the necessity of any judgment on the Counterclaims asserted by Bank of America and FNMA (those Counterclaims being derivative of the try title action filed by Petitioners), those Counterclaims are also hereby DISMISSED.
By the court.
[Note 1] The Foreclosure Sale took place at Locus on June 4, 2012 at 10:00 A.M., and was conducted by a public auctioneer employed by Towne Auction, Michael S. Kane. Bank of America was the highest bidder at the Foreclosure Sale and purchased Locus for $177,553.84.
[Note 2] On or about December 23, 2010, an assignment of mortgage dated December 20, 2010 from MERS to BAC (later succeeded by Bank of America by merger), was recorded at the Registry in Book 18604, Page 432 (the Assignment).
[Note 3] On November 30, 2004, Petitioners executed a note (the Note) in the original principal amount of $168,000.00 to Gateway Funding Diversified Mortgage Services, L.P. (Gateway). FNMA purchased and acquired the Note on or about December 23, 2004.
[Note 4] On November 30, 2004, Petitioners granted a mortgage (the Mortgage) on Locus to MERS, acting as nominee for Gateway, the Lender, to secure the Note. The Mortgage was recorded on December 6, 2004 with the Registry at Book 14677, Page 580.
[Note 5] On June 16, 2008, Countrywide Home Loans Servicing LP (Countrywide), which at the time serviced the loan on behalf of the holder of the Note, sent a Notice of Intention to Foreclose to Petitioners informing Petitioners of their right to cure their default on the Note (the June 2008 Letter). Among other defects in the Foreclosure Sale process, Petitioners claim that the June 2008 Letter did not comply with all of the statutory requirements set forth in G.L. c. 244 § 35A(h) nor did the June 2008 Letter strictly comply with the contractual pre-foreclosure notice requirements set forth in Paragraph 22 of the Mortgage.
[Note 6] On June 8, 2012, Bank of America assigned its successful bid on Locus to FNMA (the Assignment of Bid) and, on the same date, executed a foreclosure deed granting Locus to FNMA (the Foreclosure Deed), and an affidavit of sale (the Affidavit of Sale). The Foreclosure Deed is recorded with the Registry at Book 19297, Page 138. The Assignment of Bid appears as Exhibit B to the Foreclosure Deed and Affidavit of Sale, and is recorded with the Registry at Book 1297, Page 141.
[Note 7] FNMAs Motion for Summary Judgment was not marked up for hearing at that time, and shortly after its filing, the parties agreed to and requested a stay of the proceedings in this action while they awaited a ruling on a motion for reconsideration pending before the Housing Court Western Division (Hampden) Housing Court in a parallel summary process action, Federal Natl Mortgage Assoc. v. Campbell, 12-SP-2878, discussed infra. The stay in this case was later lifted and Respondents requested that the court set a dispositive motion briefing schedule. By Post- hearing Order dated March 17, 2015, the court set a briefing schedule for dispositive motions and noted (in Footnote 2) that FNMAs newly-filed Motion shall replace the Motion for Summary Judgment filed by FNMA on February 28, 2014.