A big decision by a Massachusetts court last week could change the way foreclosures are viewed in this country. Because of a lack of signed paperwork, the Supreme Court in Massachusetts ruled that two banks couldn’t legally foreclose on homes.
Mortgage paperwork needs to be physically signed if title can properly be transferred from one party to another. In the foreclosure process, the loan can get transferred numerous times before being sold to investors. It’s very possible (as in this case) that paperwork misses getting signed from one transfer to another.
One of the justices stated in their ruling that the party that wants to foreclose most hold the mortgage at the time of sale to actually have the authority to foreclose on the property. This is the first ruling by a state high court regarding banks being able to foreclose without proper paperwork saying they hold the mortgage. Since cases were filed in many other states around the country regarding this same issue, many were waiting to hear about what Massachusetts decided first.
And now it’s possible that the plaintiffs in this case own their home free and clear. No more mortgage payments and no issues of foreclosure. So what does this mean? Make sure to find out if all paperwork is in order before leaving your home. You will definitely want to consult with an attorney to help you with this. Keep all paperwork received from your lender in a file, as well as information about anyone you spoke to on the phone, the conversations you had, and dates and times. This will be a paper trail for your benefit if an issue ever arises.
I couldn’t agree more with the Supreme Court here. Nobody should be allowed to take possession of your home unless they truly hold the loan. It’s true that you technically aren’t the owner of a home unless you have a zero balance on your home. But there needs to be paperwork in place regarding a transfer of title if it ever comes to that.