FANNIE MAE v CARVALHO | Massachusetts Foreclosure and Redemption of Mortgages Law, Gen.L. c.244 §35A, and therefore did not comply with the terms of the Mortgage Para 22 ... the sale is wholly void


FANNIE MAE v CARVALHO | Massachusetts Foreclosure and Redemption of Mortgages Law, Gen.L. c.244 §35A, and therefore did not comply with the terms of the Mortgage Para 22 … the sale is wholly void

FANNIE MAE v CARVALHO | Massachusetts Foreclosure and Redemption of Mortgages Law, Gen.L. c.244 §35A, and therefore did not comply with the terms of the Mortgage Para 22 … the sale is wholly void



– v.-



No. 12-SP-1039
After hearing in this post-foreclosure summary process case, the motion by the plaintiff
[Doc.#31, 40, 43, 44] for summary judgment is allowed in part and denied in part and the cross
motion by the defendants [Doc.#42, 45] is allowed.

I allow the plaintiffs motion to dismiss as a matter oflaw the defendants’ landlord-tenant
law defenses and counterclaims [Doc.#14; Doc.#31A Exh.H] except insofar as they are interposed
to setoff the plaintiffs claim for use and occupancy rent. The reason is that there was never any
landlord tenant relationship between the plaintiff or its predecessor and the defendants. See my
decisions in Wells Fargo Bank v. Amero , N.E.Hsg.Ct. No. 12-SP-0870 (May 21, 2012, and
August 31, 2012) (as a matter of substantive law, without a leasehold or rental relationship between
the parties, there is no warranty or covenant or contractual or quasi-contractual duty to repair as
might support a defective housing “conditions” claim or defense under the habitability, quiet
enjoyment, rent withholding, or other landlord tenant laws). See also, Deutsche Bank v. Gabriel, 81
Mass.App. 564, 570-573, 965 N.E.2d 875, 880-882 (2012) (as a matter of procedural law,
“conditions” claims and defenses by former mortgagors are not available under Gen.L. c.239 §8A).
On the present state of the record the defendants’ predatory lending and HAMP-based Chapter 93A
and disability-based reasonable accommodation claims shall remain pending.

I allow the defendants’ motion to dismiss the plaintiffs claim for possession that is based
on a foreclosure. The reason is that the foreclosure did not comply with the Massachusetts
Foreclosure and Redemption of Mortgages Law, Gen.L. c.244 §35A, and therefore did not comply
with the terms of the Mortgage which invokes the Statutory Power of Sale and “Applicable
Law”) and Gen.L. c.183 §21 (“first complying with the terms of the mortgage and with the statutes
relating to the foreclosure of mortgages by the exercise of a power of sale”).

1. Non-compliance

The mortgagee was required by the Massachusetts Foreclosure and Redemption of Mortgages
Law, Gen.L. c.244 §35A(b), to “not accelerate maturity of the … mortgage obligation or otherwise
enforce the mortgage because of a default … until at least 90 days after the date a written notice is
given by the mortgagee to the mortgagor.” The notice was required by Gen.L. c.244 §35A( c)( 4) to
include “the name and address of the mortgagee, or anyone holding thereunder” and by Gen.L. c.244
§35A(c)(5) to include “the name of any current and former mortgage broker or mortgage loan
originator for such mortgage or note securing the residential property.”

The 90 days notice of default by “Wells Fargo Home Mortgage” dated June 17, 2010,
[Doc.#24 Exh.2, 3; Doc.#42A Exh.KRC-3, TBV-l; Doc.#45A] stated “The current mortgagee is
Wells Fargo Bank, N.A.” However, a triable issue of fact exists in this case whether Fannie Mae and
not Wells Fargo Bank then owned the mortgage.

Part of the defendants’ evidence that Fannie Mae and not Wells Fargo Bank owned the
mortgage consists of findings in the “troubling” case ofJP Morgan Chase Bank, N.A. v. Butler, 40
Misc.3d 1205(A), 2013 WL3359283, 2013 N.Y. Slip Op. 51050(U) (Kings Co. Sup.Ct., Schack, J.,
July 5,2013), as to “numerous misrepresentations” and “continued subterfuge” about ownership of
the mortgage and note, stating that “Fannie Mae is the ‘Wizard of Oz,’ operating behind the curtain,
and the real owner of the subject … note and mortgage”; that “Fannie Mae evaded its responsibility
to be the real plaintiff in interest in the instant action or other foreclosure proceedings”; by “Fannie
Mae’s roadmap of how to inveigle and deceive a court”; that “Fannie Mae’s Servicing Guide, with
its deceptive practices to fool courts, does not supercede New York law”; and that the Guide which
authorized “an automatic cashless Fannie Mae transaction” in “bad faith” evidenced a “fraud upon
the court” and “unclean hands” by Fannie Mae, its servicer bank, and various counsel.

If in fact the notice of default dated June 17,2010, under Gen.L. c.244 §35A identifying
“Wells Fargo Bank, N.A.” as the “current mortgagee” (or the Notice of Mortgage Foreclosure Sale
dated September 29, 2011, under Gen.L. c.244 §14 identifying “Wells Fargo Bank, N.A.” as the
“Present holder of mortgage” [Doc.#3IA Exh.B,C; Doc.#40A Exh.B]) misidentified the mortgage
holder at the time of the notices or sale, such defect would unquestionably void the sale. See, the
seminal “strict compliance” case of Roche v. Farnsworth, 106 Mass. (1 0 Browne) 509 (1871 ) (a
power of sale must be executed in strict compliance with its terms and bare literal compliance is not
enough; a mortgage sale was void where the notice of sale identified the original mortgagor and
mortgagee but not the assignee and mortgage holder at the time of the notice and sale).

Regardless, the notice of default was otherwise defective. The notice dated June 17, 2010,
was silent as to the existence of any mortgage broker although the Mortgage itself dated June 11,
2008, clearly stated “No Mortgage Broker was Involved with this Mortgage.” The notice stated “The
name ofthe person that originated your loan is NI A” although the Mortgage clearly identified “Wells
Fargo Bank, N.A.” as the original mortgagee. These defects and omissions rendered the foreclosure
sale on November 30, 2011, [Doc.#3lA Exh.D; Doc.#40A Exh.C] and the assignment of bid
[Doc.#31 A Exh.E; Doc.#40A Exh.D] and foreclosure deed dated December 5, 2011, [Doc.#31 A
Exh.D; Doc.#40A Exh.C] invalid and ineffectual.

See, Eaton v. Federal National Mortgage Ass’n, 462 Mass. 569, 579-581, 969 N.E.2d 1118,
1127 -1128 (2012) (“one who sells under a power [ of sale] must follow strictly [ statutory] tenns”);
Bank of New York v. Bailey, 460 Mass. 327,332,951 N.E.2d 331,335 (2011) (“the judge may
consider the former homeowner’s defense that the plaintiffs title is invalid because the foreclosure
was not conducted strictly according to the statute”); U.S. Bank v. Ibanez, 458 Mass. 637, 646-647,
655, 941 N.E.2d 40, 49-50, 55-56 (2011) (“Recognizing the substantial power that the statutory
scheme affords to a mortgage holder to foreclose without immediate judicial oversight, we adhere
to the familiar rule that’ one who sells under a power [ of sale] must follow strictly its terms. If he
fails to do so there is no valid execution of the power, and the sale is wholly void. “‘; “[ the] power
of sale contained in mortgage ‘must be executed in strict compliance with its terms”‘; “what is
surprising about these cases is not the statement of principles articulated by the court regarding title
law and the law of foreclosure in Massachusetts, but rather the utter carelessness with which the
plaintiff banks documented the titles to their assets. There is no dispute that the mortgagors of the
properties in question had defaulted on their obligations, and that the mortgaged properties were
subject to foreclosure. Before commencing such an action, however, the holder of an assigned
mortgage needs to take care to ensure that his legal paperwork is in order. Although there was no
apparent actual unfairness here to the mortgagors, that is not the point. Foreclosure is a powerful act
with significant consequences, and Massachusetts law has always required that it proceed strictly in
accord with the statutes that govern it. As the opinion of the court notes, such strict compliance is
necessary because Massachusetts both is a title theory State and allows for extrajudicial


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3 Responses to “FANNIE MAE v CARVALHO | Massachusetts Foreclosure and Redemption of Mortgages Law, Gen.L. c.244 §35A, and therefore did not comply with the terms of the Mortgage Para 22 … the sale is wholly void”

  1. Mike says:

    Last week I received 2 Class Action Settlement notices. The case is Saccoccio v. JP Morgan Chase, et al. The day after receiving those I got 6 more just like the first two, except all 8 had different Case and Control Numbers.

    The case is from the Southern District of Florida and involves a $300M settlement negotiated for Chase’s force-placed insurance policies.

    Chase continues to force place hazard insurance policies (even on properties already foreclosed!) and apparently in multiples for a single loan.
    Please go to the website and read the effect of filing a claim, but MORE importantly, the effect of doing nothing…or failing to opt out!

    YOU FORFEIT ANY AND ALL CLAIMS, PAST, PRESENT OR FUTURE as against Chase. Do yourselves a favor and read the terms of the proposed settlement available at the website above. It is not so clear in the packet you will receive by mail, although it is spelled out in bold faced all caps at the bottom of page 1 of the insert:


    You need to be informed as it looks like Chase is attempting to finally and forever dispose of a large number of claims utilizing another sneeky back door “settlement” approach. Take the time to read and fully understand what is coming to you soon. The deadlines to respond are very strict and have huge ramifications.

  2. Mike says:

    Follow up!

    It just occurred to me that TENS or maybe even HUNDREDS OF THOUSANDS of those affected might not even receive the NOTICE if they were already foreclosed and evicted more than one year ago and therefore the USPS change of address for forwarding mail may not be deliverable.

    Please follow up as the way the proposed settlement reads is that if 5% of those affected opt out it makes the settlement go away!

    Offered only as instructive information, not a legal opinion. I am not an attorney. I welcome any and all feedback.

  3. Charles Reed says:

    Any and all FHA, VA or USDA borrowers that were originated or purchase by Washington Mutual Bank and were serviced by Wells Fargo and foreclosed as you my have thought that Wells Fargo purchase your loan when in fact they only enter a mortgage servicing agreement on Jul 31, 2006.

    Over the net few months Wells Fargo started servicing the loans change who you paid your payment to but not who you actually owed. Borrowers were sent a change in servicing only as there was not a sale, and the name on the billing statement change so the assumption was that the owner had changed, which was in fact not the case.

    Now we have this foreclosure crisis, and banks needed a bailout as well as borrowers, however a Wells Fargo Bank that not owed a debt from borrowers and worked to defraud the borrowers by keeping information as to who was the actual debt holder.

    Wells Fargo commits fraud when the file a Notice of Default naming themselves as the Note holder as the owner of the debt. This is done to process the foreclose sale and they Sell Stolen Good to the Federal Government who in return, resells the properties to unsuspecting buyer.

    So now we doubled the harm not only to the rightful owner of the properties but also to the current occupants of the properties!

    Were is the Justice Dept and HUD in these matter? They are hiding Ginnie Mae role in the crime, and now this piece is telling the same tale of Fannie & Freddie like involvement of the same crimes!

    Taxpayer are do with treble damage for just 2009-2010 are due $24 billion for False Claim or the government loans that requested modifications through the President’s Making Home Affordable! 800,000 government loans not ever allowed to be approved for a modification because Ginnie Mae did not have any authorization to modify these loans, because they are not the owner of the debt but do hold the blank Notes which are forever worthless!


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