Editor: David Reiss
Brooklyn Law School

June 28, 2013

Massachusetts Trial Court Limits Ibanez Holding by Rejecting Plaintiff’s Proposition That Foreclosing Party Needs to Hold The Mortgage in Order to Bring a Service Member’s Action

By Ebube Okoli

This action commenced in this court on August 12, 2009. The plaintiff in Randle v. GMAC, No. 09 MISC 408202 GHP, Allison Randle, sought to prevent a foreclosure sale by defendant GMAC Mortgage, LLC [GMAC], and asked the court for judgment declaring that GMAC did not hold any claim secured by a certain mortgage recorded with the county registry of deeds. Therefore GMAC lacked standing to bring such an action against plaintiff Randle pursuant to the Servicemembers Civil Relief Act, and under legislation enacted in Massachusetts under and pursuant to that federal law.

Partially relying on the holding from U.S. Bank Nat’l Assoc. v. Ibanez, 17 LCR 202 (2009), the plaintiff claimed that she had a right to challenge the standing of GMAC to have filed the Servicemembers Case as a vehicle to vindicating this right, she had filed the Miscellaneous Case.

In relying on Ibanez the court found that the plaintiff confused or conflated the issue in Ibanez with the issues in her case. In Ibanez two foreclosures were determined to be invalid because the foreclosing parties failed to comply with the provisions of G.L. c. 244, § 14. These provisions required that requisite notice be given which “identifies the holder of the mortgage.” See Ibanez, 17 LCR at 204 [failure to identify holder of mortgage renders sale void as matter of law]; Ibanez, 17 LCR at 206-07 [foreclosure invalid where foreclosing party named in notice had not been assigned mortgage either on or off record].

In reaching this decision in Ibanez, the Land Court determined that a bank did not “hold” a mortgage, within the meaning of G.L. c. 244, §14, before a valid assignment had been executed and delivered. However, it was also noted that nothing from the Ibanez decision stood for the proposition that a foreclosing party needs to “hold” the mortgage to file a complaint under the Servicemembers Civil Relief Act for a determination that the mortgagor or owner is not entitled to the benefits of the federal Act, and the plaintiff’s complaint pointed to neither an authority in support of such a contention nor precedent in support of her contention.

Accordingly, the court in the current case decided there was no need to consider the question of whether GMAC Mortgage had standing to commence the Servicemembers Case, deciding that the answer to such a question could not and did not affect the outcome in such a case.

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