April 15, 2021 — Maurice Wutscher attorney Kevin Hudspeth has written an article for the American Bar Association’s news magazine Business Law Today in which he discusses the Massachusetts foreclosure process and complications that arise for lenders when a note is lost.
In “Much Obliged: Massachusetts Lenders Shouldn’t Have to Lose It Over Lost Notes,” he writes, “a mortgage secures the borrower’s obligation to repay the debt, not the lender’s ability to enforce the note serving as evidence of the debt. Accordingly, the Massachusetts statutory power of sale should allow lenders who can prove that they own a lost mortgage note to foreclose even if they cannot show that the UCC would allow them to enforce the lost note.”
Mr. Hudspeth writes that harmonizing a ruling from the Massachusetts Supreme Court in Eaton v. Fannie Mae with the state UCC “should allow a lender who can demonstrate that it owns a lost mortgage note using ‘principles of the law of property’ to exercise the statutory power of sale. If the lender could not demonstrate its entitlement to enforce the lost note under Massachusetts’ UCC, it presumably could not collect any deficiency after the sale or otherwise obtain a judgment on the note, but reading Eaton together with the Massachusetts UCC should allow the lender to foreclose under the statutory power of sale as long as it can demonstrate that it owns the mortgage note.”
Kevin Hudspeth is of counsel to Maurice Wutscher LLP. He has substantial litigation experience in federal and state courts across the country, predominantly representing national mortgage loan servicers on a wide variety of issues. He regularly litigates cases involving issues such as real estate litigation, commercial business disputes, Uniform Commercial Code litigation, loan repurchase litigation, and contested foreclosures.