Massachusetts Supreme Judicial Court Foreclosure Decisions

On January 7, 2011, the Massachusetts Supreme Judicial Court (the "Court") issued its decisions in the closely watched foreclosure cases, U.S. Bank National Association, trustee vs. Antonio Ibanez ("Ibanez"), and a consolidated companion case, Wells Fargo, N.A., trustee vs. Mark LaRace & Another ("LaRace").¹ Although the Court ruled against the trustees, its decisions do not cast doubt on the method in which mortgage loans were typically conveyed to residential mortgage-backed securities ("RMBS") securitization trusts. As with many recent cases, however, there were issues with how the foreclosures were processed.

The primary issues in Ibanez and LaRace were whether the plaintiffs, U.S. Bank and Wells Fargo, in their capacity as trustees in securitizations, held clear title to foreclosed property given that they foreclosed prior to completing or recording the assignments of mortgage from the mortgagees of record to themselves as holders. In issuing its decisions,