On November 25, 2015 Chapter 141, Acts of 2015, An Act Clearing Titles to Foreclosed Properties, was signed into Massachusetts law by Governor Baker. Massachusetts Senate Bill 2015 now Chapter 141 of the Acts of 2015 is commonly called the Massachusetts Foreclosure Title Clearing Statute and it became effective on December 31, 2015. The general purpose of this new law was to alleviate uncertainty in titles to foreclosed properties after the Ibanez decision and establish a deadline by which challenges to them may be raised or forever barred.
The Act amended Mass. Gen. Law c. 244 s. 15 to include a three-year time limit for challenging a recorded foreclosure affidavit. After three years from the date of recording, a foreclosure affidavit shall be conclusive evidence in favor of arm’s length purchasers for value against challenges by foreclosed borrowers who no longer occupy the subject property. After that the affidavit of sale provides clear title to the arm’s length third party purchaser even if the underlying foreclosure contained certain defects. In order to have a right to challenge the validity of a foreclosure sale in Massachusetts under the new act, an action (lawsuit) must commence AND a correct copy of the complaint or pleading asserting the challenge must be recorded in the registry of deeds for the county in which the property lies, all within the three-year period.
The Statute also provided a one-year grace period for borrowers to challenge pre-2016 foreclosures that occurred under mortgagee’s power of sale in Massachusetts. Aggrieved parties who wished to challenge such a foreclosure had from January 1, 2016 through December 31, 2016 to comply with the terms of the new statutory requirements to preserve their challenge or they would be barred from doing so.