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Mass. SJC Holds Omission of Post-Foreclosure Notice Did Not Void Foreclosure

The Massachusetts Supreme Judicial Court (“SJC”) recently affirmed a lower court’s ruling that a mortgagee’s failure to send a post-foreclosure notice required by Mass. Gen. Laws c. 244, § 15A does not render a foreclosure void.

A copy of the opinion in Turra v. Deutsche Bank Trust Company Americas is available at:  Link to Opinion.

A mortgagee notified a borrower that he was in default under the terms of his mortgage.  The mortgagee subsequently foreclosed on the property and commenced a summary process action.  The borrower then filed suit against the mortgagee, and the mortgagee moved to dismiss the borrower’s claims.

In opposition to the mortgagee’s motion to dismiss, the borrower argued among other things that the foreclosure was void because the mortgagee failed to strictly comply with the power of sale set forth in Mass. Gen. Laws c. 183, § 21, and further regulated by Mass. Gen. Laws c. 183, §§ 11-17C.

Specifically, the borrower argued that the mortgagee failed to comply with Mass. Gen. Laws c. 244, § 15A, which states:

a mortgagee conveying title to mortgaged premises pursuant to the provisions of this chapter shall, within thirty days of taking possession or conveying title, notify . . . the office of assessor or collector of taxes of the municipality in which the premises are located and any persons, companies, districts, commissions or other entities of any kind which provide water or sewer service to the premises, of said taking possession or conveying title.

The mortgagee did not dispute that it did not provide the required post-foreclosure notice, but maintained that this omission did not render the foreclosure void.  The trial judge agreed, noting that the duty of notification set forth in Section 15A arises after foreclosure and is not a duty that affects the right to foreclose.  The borrower appealed.

On appeal, the SJC noted that it previously held that one who sells under the power of sale “must follow strictly its terms” or the sale will be “wholly void.”  U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 646 (2011).

As the SJC also noted, the requirement of strict compliance and when it is, and is not, required was further considered in several subsequent cases.  In those cases, the SJC referred to Mass. Gen. Laws c. 244, §§ 11-17C, collectively as the provisions that further regulate the power of sale set forth in Mass. Gen. Laws c. 183, § 21.

However, the SJC noted that those earlier cases all related to the relationship between a mortgagee and mortgagor.  Here, the Court noted that the obligation set forth in Section 15A to provide a post-foreclosure notice to a taxing authority or water and sewer utility involves the foreclosing mortgagee and a third party.

Thus, the Court held that a failure to comply with the provisions of Section 15A does not create any potential harm to the mortgagor.  Accordingly, the SJC held, the mortgagee’s failure to provide notice as set forth in Section 15A had no consequential effect on the borrower.

In affirming the trial court’s decision, the SJC noted that, although the language in its earlier decisions suggested that failure to strictly comply with any provision contained in Mass. Gen. Laws. c. 244, §§ 11-17C will render a foreclosure void, that was not its intent.

Accordingly, the SJC held that because Mass. Gen. Laws c. 244, § 15A does not set forth any pre-foreclosure requirements that are part of the foreclosure process, a mortgagee’s failure to comply with Section 15A’s post-foreclosure provisions does not render a foreclosure void.

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