A man who bought a house that turned out to be an invalid foreclosure cannot sue the previous homeowner over his clouded title because the bank foreclosed before receiving an actual mortgage assignment, the Massachusetts Supreme Judicial Court said Tuesday.
An exactly-correct holding.
The putative “buyer” of the foreclosure obtained his deed via a quit-claim from the foreclosing entity that held title post-foreclosure.
The problem is that the foreclosing entity did not properly prove its case and thus had nothing to convey.
The vagaries of quit-claims are something that was explained to me a number of years ago. I can legally sell you a quit-claim deed on the White House! Of course you’re buying nothing; a quit-claim only releases to you that which I actually have, and since I have no lawful interest in the White House, you’re obtaining nothing.
Therefore the bank sold an empty box (heh, haven’t we heard that before with alleged “MBS”?) to the buyer, who tendered good money. When the buyer found out the title was defective he tried to sue the former owner of the house.
Uh, nope! The buyer purchased nothing and potentially has a fraud claim against the selling bank, which marketed to him a deed that it did not have lawful possession of. In fact I’d go so far as to argue that this might even meet the standard of criminal fraud, particularly if robosigned or otherwise legally-defective paperwork was involved and the institution had constructive or (worse) actual knowledge that the paperwork was no good.
“The issue for a homeowner is having to prove that a foreclosing entity had the right to foreclosure. But if I am someone who has bought a foreclosure, I now cannot sell my home until I can prove that the foreclosing entity had that right of foreclosure, which might be difficult for me to prove.”
Awwwwww…. poor widdle bank has to actually have what it wants to sell before it sells it, or it might find itself on the wrong end of a fraud charge (either civil or criminal)? Gee, who’d have ever thought that it was unreasonable to expect that when you buy a box of chocolates there are actually chocolates in there, not an empty box or worse, painted (by the bank!) dog turds.
And people wonder why “OWS” is “occupying” Wall Street (and elsewhere)? This sort of crap should have been met with handcuffs years ago; it’s not like there wasn’t any knowledge of it, given that the FBI warned of an “epidemic” of mortgage fraud back in the early part of the 2000s!
Maybe what we need here is some citizens arrests if we can’t actually expect law enforcement to do their damn job.