Masssachussetts takes on the Medusa

The Massachussetts Attorney General has cast herself as Perseus, hoping to slay the many headed banking Medusa that allegedly has been foreclosing upon Massachussetts citizens in violation of state recording and foreclosure laws. The December 1, 2010 Complaint alleges that lenders have sued to foreclose while falsely representing themselves as the "holder" of the indebtedness. The Complaint recites examples where the foreclosing lender did not take actual assignment of the mortgage until after the cases were filed, after important orders and affidavits were filed, or even after the foreclosure process was final. This is alleged to be a deceptive and unfair trade practice.

But wait, there's more!

Unlike Maryland, the Commonwealth of Massachussetts requires that every transaction involving real property, including assignments of interests in the recorded liens, must hit the land records. Several lenders are being sued for deceptive and unfair trade practices for keeping MERS related assignments off record.

WWMD (what would Maryland do)?  IHTS (it's hard to say). Read more after the jump.

And now we wait for the Maryland Court of Appeals to do its work.

On June 7, 2011, I was privileged to argue questions of law certified from the U.S. Bankruptcy Court before the Maryland Court of Appeals.  At issue is the effect of Maryland's curative statutes, and how it operates to bar the bankruptcy trustee's 130+ lien avoidance actions, and oppositions to lender motions for relief from the automatic stay.

The court's website has a webcast of the oral arguments, if you are so inclined to burn your billable time over a cup of coffee. The case is captioned Guttman v. Wells Fargo, Misc. #20.  I believe the link is at the top of the page.

This issue will impact the title industry in a significant way.  The 35 cases in this office, alone, implicate over $7 Million in secured liens that could be rendered unsecured.

Stay tuned.