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SJC Decision Limits Challenges to Foreclosure Based on Right to Cure

The Massachusetts Supreme Judicial Court recently ruled that the Massachusetts right-to-cure statute, Chapter 244, Section 35A of the General Laws of Massachusetts (“Section 35A”) is not part of the foreclosure process. In its March 14 decision, the court held that the notice and right-to-cure requirements under Section 35A are instead pre-foreclosure undertakings that, when satisfied, may eliminate a default and preclude the initiation of foreclosure proceedings. The case involved a default on a home mortgage loan in which the borrower was sent a right-to-cure notice under Section 35A and failed to cure the default. After a foreclosure sale, the foreclosing lender brought a summary process action to evict the borrower. The borrower argued that the Section 35A notice he received from the mortgage servicer prior to the foreclosure, informing him of his right to cure, failed to correctly state the mortgagee of record and that, as a result, the foreclosing lender was not entitled to possession of the property because the foreclosure was not done in strict compliance with the power of sale provided in the mortgage, thereby rendering the foreclosure void. Chapter 183, Section 21, of the General Laws of Massachusetts provides that, before a mortgagee may sell mortgaged premises by public auction after a default, the mortgagee first must comply “with the terms of the mortgage and with the statutes relating to the foreclosure of mortgages by the exercise of a power of sale.” The court noted, however, that Section 35A “is designed to give a mortgagor a fair opportunity to cure a default before the debt is accelerated and before the foreclosure process is commenced” (emphasis added). As a result, the court held that Section 35A “is not one of the statutes ‘relating to the foreclosure of mortgages by the exercise of a power of sale’” referenced in Chapter 183, Section 21.

Originally posted on, by Kenneth F. Ehrlich, Wendy M. Fiscus, Matthew D. Hanaghan, Michael K. Krebs and Beth H. Mitchell, on March 31, 2014

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