Consumer Rights Impact Advocacy
The GBLS Consumer Right Unit develops impact litigation around foreclosure prevention, predatory lending, discriminatory lending practices, debt collection, credit discrimination and other consumer issues. The current focus of the Unit's work is on the foreclosure crisis.
Some of our recent impact litigation case include:
Legal Challenges to the Right of Lenders to Foreclose without Having the Proper Assignments of the Mortgage
In U.S. Bank v. Ibanez, GBLS attorneys were part of the legal team that challenged the bank’s right to foreclose on the grounds that the bank did not have proper assignment of the mortgage prior to foreclosure. In January 2011, the Massachusetts Supreme Judicial Court ruled against foreclosing lenders, upholding a lower court’s decision that the two banks involved in the Ibanez case did not hold proper title to the property prior to the foreclosure and therefore did not have standing to foreclose. The Court held that back dated assignments and assignments in blank were not sufficient to show the bank held the mortgage prior to the foreclosure. The ruling has broad implications for foreclosures in Massachusetts as well as nationally. GBLS’ goal in representing Mr. Ibanez was to create more safeguards for homeowners in the foreclosure process and ensure compliance with Massachusetts foreclosure law.
Home Affordable Modification Program (HAMP) Litigation
Many banks are failing to comply with HAMP loan modification guidelines. We filed suit for a homeowner whose home was foreclosed while he was being evaluated for a HAMP modification, in violation of the guidelines. We obtained a very good decision from a U. S. District Court Magistrate, holding that we alleged sufficient facts to state a claim under the Massachusetts Consumer Protection Law, M.G.L.c.93A, and that Wells’ misrepresentation that the foreclosure would not go forward, was actionable.
Post-Foreclosure Eviction Challenges
The Quincy District Court held in a post- foreclosure eviction that the former homeowner can challenge whether the bank acquired legal title by following the proper foreclosure procedure as governed by c. 244, § 14. The court found that the former homeowners asserted a valid defense to the foreclosure based on possible defects in the foreclosure proceeding, namely that Wells Fargo was not the holder of Defendants' mortgage at any time during default and could not foreclose the mortgage.
The Consumer Rights Unit is actively involved in developing additional impact litigation around abusive, predatory and/or discriminatory lending practices and coordinating such impact
We have advocated for greater protections for homeowners and tenants in the foreclosure process in Massachusetts.
Judicial Foreclosure: One of our main priorities is to create a judicial process for foreclosure in Massachusetts. Massachusetts is a non-judicial state, meaning homeowners can lose their homes to foreclosure without ever having an opportunity to go to court and contest the foreclosure. We have been working with the Massachusetts Alliance Against Predatory Lending, a state-wide coalition of over 60 organizations, to get a Judicial Foreclosure Bill passed in the Legislature.
Just Cause Eviction for Post-Foreclosure Tenants: We were successful in the last Legislative Session in getting strong protections for tenants, enabling them to remain in their homes after foreclosure until the bank sells the property.
Mandatory Mediation: We are working on legislation that would requires banks to mediate in good faith with homeowners to identify alternative resolutions before starting foreclosure. Approximately 25 other states have such mandatory mediation bills which have proved very successful in preventing foreclosures.