In an appeal that drew on court opinions from AARP, the National Center for Consumer Law, the Massachusetts Attorney General, and others, the state’s highest court, the Massachusetts Supreme Court, recently reversed some of the trial court’s summary judgments. , supported some. Favors the mortgagee on counterclaims brought by the borrower in summary proceedings for eviction proceedings following nonjudicial foreclosure.
In its ruling, the SJC held that summarizing the eviction proceedings following nonjudicial seizure:
- Borrowers may bring counterclaims under § 15(b)(2) of the Massachusetts Predatory Home Loan Practices Act (MPHLPA), GL c. 183C, but counterclaims “must be limited to the amount necessary to mitigate or extinguish the borrower’s liability under a high mortgage, plus costs and reasonable attorneys’ fees”;
- Borrowers may not pursue timed claims under GL c. If the mortgagee does not seek monetary damages, in the form of a counterclaim or defense, he is entitled to 93A (UDAP).
a copy of the opinion of HSBC Bank USA, NA v. Morris Link to Opinion.
A borrower obtained first and second mortgage loans to purchase a home in 2005. The maturity date for both loans he had was November 1, 2035. The borrower she stopped paying in 2008.
In 2016, the mortgagee sent out a solicitation for healing rights and loan modifications, and in 2017 began the non-judicial foreclosure process. In September 2017, the mortgagee gave his 72-hour notice to terminate. The borrower did not surrender the property. The mortgagee filed a current summary eviction action in October 2017.
The borrower shall be liable for the mortgagee’s violation of the MPHLPA and GL c. 93A.”
Both parties have filed cross motions for summary judgment. The court of first instance granted the mortgagee’s motion. The borrower appealed and the intermediate court of appeals again ruled in favor of the mortgagee. The SJC granted the borrower’s application for further appeal review.
SJC first pointed out that Massachusetts’ “high-value mortgage” law, MPHLPA, allows claims against both lenders and assignees. The borrower asserted one of the transferee liability clauses, Section 15(b)(2).
Under § 15(b)(2) of the MPHLPA, a borrower may “at any time during the term of a high-cost [or] Counterclaims Including Claims for Violations [the MPHLPA](1) “after actions have been initiated to collect mortgages or seize collateral securing mortgages;” (2)) “after debts arising from mortgages have been accelerated or [sixty] or (3) “actions to retain or obtain title to a home that prohibits foreclosure or secures a loan.” The borrower asserted a claim under the third scenario as a counterclaim in the transferee’s summary eviction proceedings.
Claims under Section 15(b)(2) are not subject to the MPHLPA’s five-year statute of limitations, but instead: [the] The assignee argued that the borrower’s counterclaim against MPHLPA was “premature because the sale of the foreclosure ended the term of the mortgage. [borrowers] did not file a counterclaim during the period of [the] high mortgage.”
SJC has agreed that “the mortgage will be extinguished once the property is sold in a foreclosure sale.”look bevilaqua vs rodriguez, 460 Mass. 762, 775 (2011). The court also agreed that “there is no longer a ‘mortgage’ because there is no mortgage after the foreclosure,” and thus “the period of the ‘high-cost mortgage’ has ended.”
However, the SJC noted that “§ 15(b)(2) refers to “the term of the high-value mortgage,” not just “the term of the mortgage itself.” The mortgage lien is extinguished by the foreclosure, but the borrower remains responsible for the shortfall. “Remaining shortfalls may be collected through shortfall actions in accordance with the requirements of GL c. 244, § 17B.” Additionally, § 15(b)(2) permits claims and defenses. increase. . . take ownership of a home that insures a loan” and “this phrase appears to include post-foreclosure summary process actions.”
The SJC turned to MPHLPA’s legislative history, as the statute alone cannot solve the problem. The court said,[b]Based on this history, and the underlying legislative intent to enact broad remedial legislation, . to the date the underlying debt is repaid or the original maturity date, whichever is earlier. Action on MPHLPA’s “Extensive Post-Foreclosure Protection”. . retain or acquire title to the home insuring the loan under Section 15(b)(2);
Accordingly, the SJC determined that the borrower’s MPHLPA counterclaim was timely. However, the court also ruled that “the § 15(b)(2) counterclaim is “amount necessary to mitigate or extinguish the borrower’s liability under a high mortgage,” plus costs and reasonable attorneys’ fees.” It also noted that it is limited to monetary damages up to costs. commission. “
For UDAP Claims Under Borrower’s GL c. 93A, SJC initially states “[o]c. Bid rigging of loans that the lender must first recognize that the borrower is unlikely to be able to repay is an “unfair” practice prohibited by the GL. 93A.” UDAP claims under the GL c. may be brought by third-party litigation. He has a four-year statute of limitations on such claims. See GL c. 260, § 5A.
The assignee argued that the borrower’s UDAP claims were based on GL c. 93A was premature as he did not file within four years of it occurring. SJC said: 93A is barred under [the four-year] c. Statute of limitations for statute of limitations, the four-year statute of limitations, is inapplicable to prevent a party from filing a defensive counterclaim alleging violations of the GL. 93A”. See GL c. 260, § 36.
However, the SJC also states:[t]o GL, c. 260, § 36, counterclaim must be limited “to plaintiff’s claims,” as a claim for indemnification. “A successful restitution claim by the defendant may reduce or eliminate the plaintiff’s claim, but may not result in affirmative recovery for the defendant.”
Here, the SJC determined that:[t]he presents a counterclaim. . . This is because the assignee’s summary process eviction action only sought possession of property, not “unpaid debt under the loan.”
Accordingly, the SJC has determined that the borrower cannot assert a premature UDAP counterclaim under GL c. 93A is admissible as a claim for indemnification in defense of assignee’s summary process eviction action.
Accordingly, SJC reversed the first instance court’s grant of summary judgment and entered judgment in favor of the assignee. [borrowers’ M]The PHLPA’s Counterclaim filed a “c. 93A Claim” and was remanded for further proceedings consistent with its opinion.