Since January 1, 2011, the lay of the land in the world of foreclosure defense has moved off center. The most significant change is the decision issued Friday by the Massachusetts Supreme Judicial court in the U.S. Bank v. Ibenez case. This decision made clear that in order for Mortgage Servicers to foreclose on Massachusetts real property that was sold into securitized trusts in Massachusetts they will have to comply with the terms of the documents that created them. Ibanez court ruled that in order to successfully foreclose the foreclosure plaintiff had to prove complete chain of transfers from the originator (company on the face of the mortgage) to the trust prior to the start of the foreclosure. That should be very simple to accomplish– however in this case it proved not to be.
Adam Levitin, a professor at Georgetown University Law Center, is becoming a recognized expert in the status of securitization in the United States. Professor Levitin makes some observations about the practical realities of the failure of the parties in mortgage securitization to play by their own rules in his blog post on Credit Slips.com. Professor Levitin opines the Mortgage Electronic Registration System (MERS) could have served as a fire wall and allowed the foreclosure plaintiff to prevail if the information on the data base had any reliability.
The practical, real word results of Ibanez will only be decided in the state courts of the nation. At this time it appears that the securitized trusts and their servicers who are seeking to foreclose may face real and significant problems if the standards set forth in Ibanez are not met.
If you are a foreclosure attorney reading Ibenez and the comments of Professor Levitin are as essential as reading Pierson v. Post. If you are a homeowner who needs to defend a foreclosure you owe it to yourself and your family to make sure that anyone you hire to represent you has done their homework. Follow this link to a list of highly trained attorneys from around the nation.