The economy may be getting back on its feet and trying to forget the hurts of the past, but it will have a hard time doing that as foreclosure cases are still trying to get a clear grounding [1]. A recent ruling on two Massachusetts foreclosures is now the talk of industry experts. Is it indicative of what’s going to happen to other foreclosure proceedings nationwide or is it something that’s unique to the state?

Last Friday, the Massachusetts Supreme Court ruled that two foreclosures instigated by Wells Fargo and U.S. Bank were invalid. After foreclosing on these two properties, Wells Fargo and U.S. Bank sold the homes at auction [1]. The Supreme Court invalidated said foreclosures, stating that both lenders failed to show legal rights to foreclose. Proper documentation to prove ownership of the mortgages, said the Supreme Court, was not presented.

U.S. Bank’s parent company U.S. Bancorp said in a statement, “[The bank] is not the originator, owner or servicer of the loan in question, nor the sponsor or depositor for the securitization trust and the mentioned foreclosure was conducted by the servicer on behalf of and in the name of the securitization trust.” American Home Mortgage Servicing noted that the ruling may have limited applicability as the basis is a law unique to Massachusetts. But Congresswoman Maxine Waters (D- California) disagrees. “The ruling today by the highest court in Massachusetts establishes important precedent to protect homeowners from wrongful foreclosures and requires banks to follow the law. I hope the influence of this ruling extends to other states,” says Waters.

[1]http://www.dsnews.com/articles/industry-responds-to-massachusetts-foreclosure-ruling-2011-01-10