Appeals Court Further Clarifies Requirements for Foreclosure Notices

Recently, the Appeals Court issued its decision in Haskins v. Deutsche Bank Trust Company.  The case raised the question of whether a notice of a mortgagor’s right to cure sent pursuant to G.L. C. 244, s. 35A is deficient if it is sent by the mortgage servicer, rather than the mortgagee, or if it mistakenly identifies the mortgage servicer as the mortgagor.  The Court determined that the notice was not deficient where it identified the servicer as the mortgagee, and directed the mortgagor to contact the servicer to address the default.

The Court reasoned that the intent of the notice to cure is to provide the mortgagor with an opportunity to avoid foreclosure by remedying the default.  Recognizing the Supreme Judicial Court’s holding in Schumacher that strict compliance with s. 35A is not required as it is not one of the statutes relating to foreclosure of mortgages by power of sale, the Appeals Court determined that the definition of “mortgagee” is broad enough to cover the servicer.   The Court also recognized that the appropriate entity for a mortgagor in default to deal with is the servicer, rather the the holder of legal or equitable interest in the mortgage.

This decision forecloses one of the popular avenues of challenging foreclosures.  Applying the “fundamentally unfair” standard, where the servicer, the entity the mortgagor must deal with in remedying its default status, is identified on the notice of the right to cure, it will be difficult for a mortgagor to argue that the notice was so fundamentally unfair as to prevent foreclosure.