Court enters summary judgment in favor of bank in wrongful foreclosure action

Courts State Issues Mortgages Foreclosure

On August 3, the U.S. District Court for the District of Massachusetts entered summary judgment in favor of a national bank regarding a mortgage borrower’s allegations that the bank engaged in, among other things, predatory lending, wrongful foreclosure, and violations of Massachusetts’ unfair or deceptive practices (UDAP) law. As to the wrongful foreclosure claim, the borrower alleged that the bank lacked the legal authority to foreclose on his property because the chain of title was compromised and the mortgage transfers were invalid prior to the bank becoming the holder of the mortgage through assignments. The court rejected the borrower’s arguments because Massachusetts law allows for “splitting the note” as long as the mortgage documents are unified at the time of foreclosure, and there was no reason to question the validity of the prior assignments. The court rejected the borrower’s predatory lending claim because the bank was not the original lender of the mortgage note and had no duty to negotiate a modification because the borrower was already in default when the bank became the holder of the mortgage. The court also dismissed the UDAP claim on procedural grounds.