ASSISTANT RECORDER, PLYMOUTH COUNTY REGISTRY DISTRICT OF THE LAND COURT vs. LOANCARE, LLC; THE HEIRS AND LEGAL REPRESENTATIVES OF THE ESTATE OF HOWARD D. FISK, HOWARD TODD FISK A/K/A TODD FISK, and JULIE LYNN BETZEN

This case was opened by the court to resolve a question arising in the Plymouth County Registry District of the Land Court concerning whether the registration of documents reflecting the foreclosure sale of a residential property, completed in January, 2020, was prohibited by St. 2020, c. 65, "An Act Providing For A Moratorium On Evictions And Foreclosures During The Covid-19 Emergency" ("c. 65") or by the foreclosure moratorium provisions of section 4022 of the federal CARES Act ("section 4022"). For the reasons that follow, the court concludes that the registration of the subject foreclosure documents is not prohibited by either c. 65 or by section 4022, and the documents are to be accepted for registration.

The assistant recorder of the Plymouth Registry District has also moved to dismiss this matter on the grounds that the court lacks jurisdiction. That motion is DENIED for the reasons that follow.

FACTS AND PROCEDURAL HISTORY

The facts concerning this matter are not in dispute, and are as follows:

1. On May 13, 2020, the Land Court was informed by counsel for LoanCare, LLC ("LoanCare"), a foreclosing mortgagee by assignment, that the Plymouth Registry District of the Land Court had refused to accept for registration documents pertaining to the foreclosure of property at 913 State Road, Unit 12, in Plymouth (the "foreclosed property"), due to apparent concerns that such registration would violate the recently enacted state and federal statutes providing for a moratorium on foreclosures.

2. The foreclosure documents that the Registry District refused to accept for registration were documents memorializing a foreclosure sale conducted on January 13, 2020, at which time LoanCare conducted a foreclosure sale pursuant to G. L. c. 244, §14 and a foreclosure by entry pursuant to G. L. c. 244, §1.

3. LoanCare was the successful bidder at the foreclosure sale on January 13, 2020, and executed a memorandum of sale on January 13, 2020, as well as a certificate of entry on the same date.

4. LoanCare assigned its successful bid to Federal National Mortgage Association on January 21, 2020.

5. A Land Court title examiner approved for registration an Affidavit Regarding Note Secured By Foreclosed Mortgage concerning the foreclosed property on March 11, 2020.

6. On April 20, 2020, the Legislature passed with an emergency preamble, and the Governor signed, St. 2020, c. 65, "An Act Providing For A Moratorium On Evictions And Foreclosures During The Covid-19 Emergency."

7. On May 13, 2020, LoanCare's counsel, by e-mail, informed the chief title examiner of the Land Court that the assistant recorder of the Plymouth Registry District of the Land Court had refused to accept for registration the foreclosure documents for the January 13, 2020 foreclosure sale and foreclosure by entry of the foreclosed property, and that the assistant recorder had informed counsel by way of explanation that foreclosure documents for foreclosures conducted prior to March 16, 2020 would only be accepted for registration "if [the Registry District] received direct instruction from the Land Court." [Note 1]

8. On May 27, 2020, in response to inquiries by the chief title examiner, the assistant recorder confirmed in an e-mail message that the Plymouth Registry District had been "refusing to accept foreclosure documents" and had been doing so in reliance on the assistant recorder's understanding that St. 2020, c. 65, the so-called foreclosure and eviction moratorium statute, "provides a specific exemption for abandoned properties, no other exemptions are listed." The assistant recorder also relied on "the entire purpose of the statute" and on opinions of others in state government in refusing to accept the foreclosure documents for registration.

9. On June 16, 2020, the chief justice of the Land Court issued an Order pursuant to the court's authority under G. L. c. 185, §60. The court ordered notification of all interested parties, and afforded the interested parties until June 26, 2020 to submit written statements of their position on the question before the court concerning whether the registration of the foreclosure documents is prohibited by statute.

10. On June 25, 2020, the assistant recorder filed a motion to dismiss, supported by a memorandum and by the affidavit of the assistant recorder. In his affidavit, the assistant recorder reported that subsequent to his refusal to accept the foreclosure documents for registration on the basis of the foreclosure moratorium statutes, an investigation by his office determined that the foreclosed property was vacant, and therefore exempt from the foreclosure moratorium.

11. On June 26, 2020, LoanCare, an interested party that had been notified by the court pursuant to the June 16, 2020 Order, submitted a position statement urging the court to order the acceptance of the foreclosure documents for registration on the ground that they were not subject to the foreclosure moratorium statutes because the foreclosure sale and entry pre-dated the effective dates of the statutes.

DISCUSSION

I. THE ASSISTANT RECORDER'S MOTION TO DISMISS IS DENIED BOTH FOR LACK OF STANDING AND ON THE MERITS.

The assistant recorder has moved to dismiss this matter, arguing that the court lacks jurisdiction to decide the question before the court. The assistant recorder reasons that, having determined, subsequent to the June 16, 2020 Order, that the foreclosed property is vacant and therefore exempt from the foreclosure statute, he is no longer "in doubt" upon the question of whether the foreclosure documents may be accepted for registration. Accordingly, he argues, the court lacks jurisdiction pursuant to G. L. c. 185, §60 to decide whether the moratorium statutes prohibited the acceptance of the documents for registration by reason of their dates of execution, regardless of the status of the property as vacant. The court concludes that the assistant recorder does not have standing to challenge the court's authority to decide a question it has determined to be in doubt, and indeed, even with the assistant recorder's change in position with respect to the registration of the foreclosure documents in this case, the question posited by the court in the June 16, 2020 Order is apparently one as to which the assistant recorder remains in doubt.

G. L. c. 185, §60, provides as follows:

If the assistant recorder is in doubt upon any question, or if any party in interest does not agree as to the proper memorandum to be made in pursuance of any deed, mortgage or other voluntary instrument presented for registration, the question shall be referred to the court for decision, either on the certificate of the assistant recorder stating the question is in doubt, or upon the suggestion in writing of any party in interest, and the court, after notice to all parties and a hearing, shall enter an order prescribing the form of memorandum to the assistant recorder, who shall make registration in accordance therewith.

In this case, it is undisputed that this matter came to the attention of the court through the written notification to the court's chief title examiner by LoanCare, holder of the mortgage to the subject property by way of assignment, and therefore a party in interest, informing the court that the assistant recorder had refused to accept the foreclosure documents for registration. This, in and of itself, was sufficient to invoke the court's jurisdiction under G. L. c. 185, § 60. A party in interest is entitled to invoke the court's jurisdiction where it "does not agree as to the proper memorandum to be made in pursuance of any . . . mortgage or other voluntary instrument presented for registration." A party in interest's entitlement to invoke the court's authority to resolve a question concerning the proper form of memorandum to be made with respect to a document presented for registration certainly extends as well to the assistant recorder's complete refusal to accept documents for registration. The court is further authorized by G. L. c. 185, §60 to consider any issue arising out of the registration of documents "upon the suggestion in writing of any party in interest." LoanCare's e-mail message to the court on May 13, 2020 asking for assistance with respect to the assistant recorder's refusal to accept the foreclosure documents for registration was such a "suggestion in writing" of a party in interest. The court was not dependent for its jurisdiction on the assistant recorder's agreement that he was in doubt on the question.

Moreover, the assistant recorder, on May 27, 2020, confirmed to the court that he had refused to accept the documents for registration because of his understanding that St. 2020, c. 65 prohibited the registration of all foreclosure documents, regardless of the date of the foreclosure sale, and regardless of the date of execution of the documents, with the sole exception being for documents pertaining to abandoned or vacant properties. It was this position of the assistant recorder, as presented by a party in interest, that presented the question the court determined needed to be answered with the June 16, 2020 Order. The assistant recorder's subsequent determination that the foreclosed property was in fact vacant, and therefore that it fit into what he understood to be the one exemption to the prohibition against registration of foreclosure documents, did not answer the question posited by his decision to initially refuse to register these documents. That question was whether documents executed with respect to a foreclosure that was completed prior to the effective date of the foreclosure moratorium statutes, but offered for registration after their effective dates, should be accepted for registration.

That question remains unanswered even after the assistant recorder's determination that the vacancy of the property fulfills an exemption in the state statute. Significantly, the assistant recorder has given no indication that he is any less "in doubt" about whether, absent the property being vacant or abandoned, pre-statute foreclosure documents should be accepted for registration. Based on his written statement of position in his May 27, 2020 e-mail message to the chief title examiner, if presented again with such documents for a property that is not vacant or abandoned, he would refuse to accept them for registration.

Accordingly, the court's jurisdiction to hear this matter pursuant to G. L. c 185, §60 is clear, and has not been rendered nonexistent or moot by the assistant recorder's recent determination that the foreclosed property is otherwise exempt from the foreclosure moratorium by reason of being vacant. Even if rendered moot by the assistant recorder's belated decision to accept the foreclosure documents on the basis of his determination that the foreclosed property is vacant, the question before the court remains in doubt, and remains a question that can be considered by the court because it is "certain, or at least very likely, to arise again in similar factual circumstances, . . . " Lockhart v. Attorney General, 390 Mass. 780 , 783 (1984).

More fundamentally, however, the assistant recorder lacks standing to challenge the court's jurisdiction to decide this matter. G. L. c. 185, §60 distinguishes between the assistant recorder on the one hand, and a party in interest on the other hand. With respect to registered land, the assistant recorder is not a party in interest, but rather acts under the general direction of the recorder of the Land Court and ultimately under the direction of the court itself.

G. L. c. 185, §10 provides that with respect to registered land, a register of deeds shall act as an assistant recorder of the Land Court, and "shall be subject to the general direction of the recorder." In turn, the recorder, pursuant to G. L. c. 185, §56, oversees the registration of documents relating to registered titles, "under the direction of the court." The assistant recorder cannot deprive the court of jurisdiction to answer a question relating to the registration of documents concerning registered titles by accepting the documents for registration for a reason that does not address the unanswered question.

II. NEITHER ST. 2020, c. 65 NOR SECTION 4022 OF THE CARES ACT PROHIBITS THE ACCEPTANCE FOR REGISTRATION OF THE FORECLOSURE DOCUMENTS.

As is noted above, the foreclosure documents that are at issue in this case pertain to a foreclosure sale that was completed in January, 2020, and for which all the foreclosure documents were executed in January, 2020. St. 2020, c. 65, became effective April 20, 2020. "That legislation establishes a time-defined 'moratorium on evictions and foreclosures during the [G]overnor's COVID-19 emergency declaration.'" Bank of New York Mellon v. King, 485 Mass. 37 (2020) (slip opinion p. 24, fn. 12). Section 5(a) of c. 65 provides in relevant part:

Notwithstanding chapter 239 or chapter 244 of the General Laws or any other general or special law to the contrary, a creditor, mortgagee or person having estate in the land mortgaged, a person authorized by a power of sale pursuant to section 14 of said chapter 244 or right of entry or the attorney duly authorized by a writing under seal or the legal guardian or conservator of such mortgagee or person acting in the name of such mortgagee or person shall not, for the purposes of foreclosure of a residential property as defined in section 35B of said chapter 244 that is not vacant or abandoned: (i) cause notice of a foreclosure sale to be published pursuant to said section 14 of said chapter 244; (ii) exercise a power of sale; (iii) exercise a right of entry; (iv) initiate a judicial or non-judicial foreclosure process; or (v) file a complaint to determine the military status of a mortgagor under the federal Servicemembers Civil Relief Act, 50 USC sections 3901 to 4043, inclusive.

The statute was enacted with an emergency preamble, meaning that it took effect on the day it was approved, April 20, 2020. The effect of an emergency preamble on a statute is that "the law goes into effect upon its passage, rather than ninety days thereafter." Opinion of the Justices, 368 Mass. 889 , 893 (1975). The period during which c. 65 is to remain in effect is provided for in section 7, as follows:

Subsection (a) of section 5 shall expire 120 days after the effective date of this act or 45 days after the COVID-19 emergency declaration has been lifted, whichever is sooner; provided, however, that the governor may postpone such expiration in increments of not more than 90 days; provided further, that the governor shall not postpone such expiration to later than 45 days after the COVID-19 emergency declaration has been lifted.

Thus, the foreclosure moratorium provisions of c. 65 are in effect for 120 days beginning April 20, 2020, unless extended as provided in the statute. There is nothing in c. 65 to indicate that the Legislature intended it to have a retroactive effect. The Supreme Judicial Court has already so held. In a dispute concerning a post-foreclosure summary process eviction, the court recently noted that the eviction moratorium provisions of St. 2020, c. 65 had no bearing on the dispute. "The instant case precedes this emergency legislation and is not covered by it." Bank of New York Mellon v. King, supra, 485 Mass. 37 , at slip opinion p. 24, fn. 12.

It remains then to determine whether the language of the statute, which was effective April 20, 2020, and which is not retroactive in its scope, explicitly prohibits the present acceptance for registration of the foreclosure documents at issue here. The statute, on a going-forward basis, as of April 20, 2020, provides that a mortgagee or other person authorized under a power of sale in a mortgage, shall not: " (i) cause notice of a foreclosure sale to be published pursuant to said section 14 of said chapter 244; (ii) exercise a power of sale; (iii) exercise a right of entry; (iv) initiate a judicial or non-judicial foreclosure process; or (v) file a complaint to determine the military status of a mortgagor under the federal Servicemembers Civil Relief Act, 50 USC sections 3901 to 4043, inclusive."

It is self-evident that all of these enumerated steps in a typical foreclosure were completed by LoanCare at least three months before the effective date of the statute, and so their completion did not violate any prohibition of the statute. Any argument that the "exercise" of the power of sale implicitly includes the registration of the foreclosure deed and related documents is belied by both statute and case law governing the exercise of the statutory power of sale. The "statutory power of sale," as defined by G. L. c. 183, §21, is the sale "by public auction on or near the premises then subject to the mortgage[.]" Section 21 "establishes affirmative requirements that a mortgagee must meet in order to foreclose by power of sale." James B. Nutter & Co. v. Estate of Murphy, 478 Mass. 664 , 668 (2018). This definition does not purport to include recording or registration of the foreclosure deed as part of the exercise of the power of sale. To the contrary, it is well established that the exercise of the statutory power of sale in a mortgage is complete "at least as early as the point in time when the memorandum of sale was executed with the purchaser at the foreclosure sale." Outpost Café, Inc. v. Fairhaven Savings Bank, 3 Mass. App. Ct. 1 , 7 (1975).

The statute nowhere explicitly prohibits the mere act of offering documents for registration, nor does it permit an assistant recorder to refuse to accept foreclosure documents for registration, with respect to a foreclosure sale that took place in a manner that did not itself violate the prohibitions in c. 65. Accordingly, LoanCare, as a mortgagee exercising a power of sale, is not in violation of the prohibitions in the statute by having offered the foreclosure documents for registration, and the assistant recorder is not prohibited by the statute from accepting the foreclosure documents for registration.

Nor does the acceptance of the foreclosure documents under the present facts violate section 4022 of the CARES Act. Section 4022(b)(2) of the CARES Act provides as follows:

(2) FORECLOSURE MORATORIUM. - Except with respect to a vacant or abandoned property, a servicer of a Federally backed mortgage loan may not initiate any judicial or non-judicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or foreclosure sale for not less than the 60-day period beginning on March 18, 2020.

Leaving aside the question whether the mortgage in the present case is a "Federally backed" mortgage - a fact not in the present record - whether acceptance of the foreclosure documents for registration during the 60-day period beginning on March 18, 2020, would be the "execut[ion of a] . . . foreclosure sale" in violation of the statute, is a moot issue. As of May 18, 2020, the federal moratorium against foreclosures expired. Accordingly, there is no present prohibition in section 4022 against the acceptance for registration of the foreclosure documents at issue in the present case.

CONCLUSION

For the reasons stated above, the assistant recorder's motion to dismiss is DENIED. Pursuant to G. L. c. 185, §60, which provides in relevant part that the Land Court shall "enter an order prescribing the form of memorandum to the assistant recorder, who shall make registration in accordance therewith," the assistant recorder is hereby ORDERED to accept for registration the foreclosure documents for the foreclosure sale and foreclosure entry of the property at 913 State Road, Unit 12, in Plymouth, and in particular, those listed in footnote 1 of this Order.

So Ordered.