Opinion
14-P-628
04-22-2015
FEDERAL NATIONAL MORTGAGE ASSOCIATION v. RYAN P. CARVALHO & another.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, Federal National Mortgage Association (Fannie Mae), appeals from a judgment entered by a judge of the Housing Court that dismissed its claim for possession of a house in a postforeclosure summary process proceeding. In this appeal, Fannie Mae argues that defects in the right-to-cure notice did not void the foreclosure and that a judgment of possession should enter in its favor. We reverse and remand for entry of judgment for Fannie Mae.
Background. Ryan P. and Kellyann Carvalho are occupants of the property in dispute at 26 Oak Point Road in Saugus. To purchase the home, Kellyann received a loan from Wells Fargo Bank, N.A. (Wells Fargo) in the amount of $410,000. The mortgage was recorded in the Essex County registry of deeds. Upon Kellyann's default, Wells Fargo began foreclosure proceedings by mailing and publishing notice. Wells Fargo proceeded with the foreclosure sale on November 30, 2011; it subsequently assigned its rights to Fannie Mae, which obtained title and sought to remove the Carvalhos.
The judge's ruling did not include factual findings. We recite the facts from the record appendix.
We use her first name to avoid confusion.
The Carvalhos argue that an agreement existed between Wells Fargo and Fannie Mae prior to the foreclosure and that Wells Fargo and Fannie Mae subsequently hid key documents. Unfortunately for them, there is inadequate record support for their assertions. See discussion, infra.
Fannie Mae moved for summary judgment, and the Carvalhos moved to dismiss Fannie Mae's claims. Ultimately, of significance, the judge ruled in favor of the Carvalhos on the basis of the lack of strict compliance with G. L. c. 244, § 35A (§ 35A). Fannie Mae appealed.
The judge found the following defects with the § 35A notice:
"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 of the person that originated your loan is N/A' although the Mortgage clearly identified 'Wells Fargo Bank, N.A.' as the original mortgagee."
Discussion. Fannie Mae argues that U.S. Bank Natl. Assn. v. Schumacher, 467 Mass. 421 (2014), which was decided after the judge's ruling in this case, requires reversal. We agree.
Under G. L. c. 183, § 21, before a mortgagee may sell the premises after default, the mortgagee must first 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." Id. at 430, quoting from G. L. C. 183, § 21. Section 35A, however, is not one of the statutes relating to the foreclosure of mortgages by the exercise of a power of sale under G. L. c. 183, § 21. Id. at 431. Failure to comply with § 35A is insufficient to void a foreclosure unless a mortgagor can show that the noncompliance led to fundamental unfairness in the entire foreclosure process. Bank of N.Y. Mellon Corp. v. Wain, 85 Mass. App. Ct. 498, 501-502 (2014).
Here, the defects in Wells Fargo's § 35A notice to Kellyann were insufficient to void the foreclosure sale as the Carvalhos cannot demonstrate that the defects rendered the foreclosure process fundamentally unfair. See ibid.
Other issues. In deciding that the notice of right to cure under § 35A was deficient, the judge first stated that "a triable issue of fact exists in this case whether Fannie Mae and not Wells Fargo Bank then owned the mortgage." Fannie Mae argues that the judge's finding was error. We agree.
A foreclosing entity must be the mortgage holder at the time of the sale. U.S. Bank Natl. Assn. v. Ibanez, 458 Mass. 637, 648 (2011). "[T]he assignment of a mortgage is a conveyance of an interest in land that requires a writing signed by the grantor." Id. at 649. See G. L. c. 183, § 3.
Here, as a matter of law, the materials in the summary judgment record that the Carvalhos placed before the judge were insufficient to show an assignment of the mortgage from Wells Fargo to Fannie Mae prior to the foreclosure sale, which would have rendered the foreclosure by Wells Fargo invalid. Based on the record, Wells Fargo owned the mortgage at the time of foreclosure and properly foreclosed on the property.
For example, the first piece of purported evidence that the Carvalhos cite in their brief is language from a May 7, 2011, letter from Wells Fargo to Kellyann that states that Fannie Mae is "the owner of the loan." Aside from the fact that holding the mortgage note (right to repayment) is not the same as holding the mortgage (an interest in land), see U.S. Bank Natl. Assn. v. Ibanez, 458 Mass. at 652, such evidence was wholly insufficient to raise a genuine issue of material fact given the documentary evidence in the record. The problem for the Carvalhos is the absence of a document showing an assignment from Wells Fargo to Fannie Mae before notice and foreclosure. The fragmented bits of "evidence" proffered by the Carvalhos are insufficient given the evidence in the record, such as the document showing the assignment from Wells Fargo to Fannie Mae after the foreclosure.
Fannie Mae's final argument is that summary judgment should enter in its favor because the Carvalhos failed to rebut its prima facie showing of right to possession via the foreclosure deed and affidavit of sale under G. L. c. 244, § 15. See Federal Natl. Mort. Assn. v. Hendricks, 463 Mass. 635, 642 (2012). We agree that the Carvalhos cannot rebut Fannie Mae's showing.
For these reasons and for substantially those in the brief of Fannie Mae, the judgment is reversed, and the matter is remanded for the entry of a new judgment awarding possession of the property to Fannie Mae.
So ordered.
By the Court (Kantrowitz, Blake & Massing, JJ.),
The panelists are listed in order of seniority.
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Clerk Entered: April 22, 2015.