Today, the Massachusetts Supreme Judicial Court (SJC) ruled against foreclosing lenders and those who purchased foreclosed properties in Massachusetts in the controversial U.S. Bank v. Ibanez case. The decision is among the earliest to address the validity of foreclosures conducted without full documentation. That issue last year prompted an uproar that led lenders such as Bank of America Corp, JPMorgan Chase & Co and Ally Financial Inc to temporarily stop seizing homes.
Courts in other U.S. states are considering similar cases, and all 50 state attorneys general are examining whether lenders are forcing people out of their homes improperly. Friday's decision may also threaten banks' ability to package mortgages into securities, including whether loans that were transferred improperly might need to be bought back. Wells Fargo and U.S. Bancorp lacked authority to foreclose after having "failed to make the required showing that they were the holders of the mortgages at the time of foreclosure," Justice Ralph Gants wrote for a unanimous court.
Below is the Opinion:
- Class Action Challenges Illegal Foreclosures in Chicago
- Summary of Oral Argument in U.S. Bank v. Ibanez
- Wells Fargo’s Homeownership Workshop
- Banks are Suing Borrowers after Foreclosure
- Securitization – The Big Fail