Try, Or Quiet, Title Action Fails Where The Plaintiff Acquired Its Interest In A Foreclosure Where The Mortgage Had Not Been Assigned To The Assignor Prior To The Commencement Of The Case

The Massachusetts Supreme Judicial Court held that a foreclosure buyer did not acquire good title to foreclosed property when the foreclosure was instituted by a party to whom the mortgage had not yet been assigned. In Bevilaqua v. Rodriguez, 460 Mass. 762, 955 N.E.2d 884 (October 18, 2011) the defendant borrower gave a mortgage to MERS as a nominee of the lender. As of the date the foreclosure commenced MERS had not assigned the mortgage to U.S. Bank N.A. Rather, U.S. Bank N.A. executed a foreclosure deed on that date referencing the mortgage and purporting to transfer the property pursuant to a foreclosure sale from U.S. Bank to U.S. Bank as Trustee under a servicing agreement. Nearly one month later MERS assigned the mortgage to U.S. Bank and a confirmatory foreclosure deed was then given by U.S. Bank to U.S. Bank as Trustee who subsequently quit-claimed the property to the plaintiff. After discovering that U.S. Bank as Trustee was not the mortgagee at the time the foreclosure was brought, the plaintiff then brought a try, or quiet, title action against the former owner of the property, seeking to compel him to bring an action to assert any adverse claims against the property or to bar him from enforcing those claims in the future. The lower court dismissed the complaint on the grounds that the plaintiff lacked standing. The reviewing court affirmed. Under Massachusetts law, the court held, in order establish standing in a try title action, the plaintiff must be a ”person in possession” and must hold ”record title” of the disputed property. The plaintiff argued that he held ”record title” due to the fact that U.S. Bank granted him a quitclaim deed. However, the Court noted that a ”single deed considered without reference to its chain of title” was insufficient to establish ”record title.” In examining the chain of title, the Court noted that in the try title action, the plaintiff ”has alleged that U.S. Bank was not the assignee of the mortgage at the time that it purported to foreclose on the property.” Therefore, ”U.S. Bank’s lack of authority to foreclose at the time it purported to foreclose is fatal to [plaintiff’s] claim to ”own” the property.” Thus, the plaintiff has no plausible claim to title where he acquired a deed following an invalid foreclosure.

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