HELP-Challenging Foreclosure Validity Court Process Best Strategy

22 Replies

Hello all, I have recently lost my mind discovering how difficult and from my point of view unreasonable the Massachusetts court process is for foreclosures and challenging their validity. I have recently purchased an REO property via xome.com with the previous owners in place. I got a good enough deal on it that even with a normal eviction factored in I thought it was still worth it.

I purchased the REO property through xome.com back in June 2021. The original owner was foreclosed on by the bank in February of 2020. We received from the bank a 90 day right to cure that they sent out November of 2018. A foreclosure notice that was mailed first class to the previous owner in November 2019. Several other documents on the registry of deeds as well. Their was enough here for the closing attorney and I to feel like we did enough due diligence to move forward with the purchase without expecting the foreclosure's validity to be questioned. I would also like to mention that I offered the previous owners a more than appropriate cash for keys offer.

The previous owner who was foreclosed on just so happened to work for a company in Massachusetts called Wayfinder who assists people with foreclosure preventions. Not that it matters but, it leads me to believe that they were privy to this, for lack of better words, loop hole the whole time. Anyways, that loop hole is the previous owner challenged the foreclosure based on the grounds that the bank did not have a face-to-face meeting with them or better known as 24 CFR § 203.604 - Contact with the mortgagor. 

The thought alone that the court system of Massachusetts did not check this before the initial foreclosure is irresponsible and only slowing the court system down by causing more work. Then, the fact that this measly Face-to-Face matter can put the original eviction on hold for what looks like will be at least 2 full years before the courts hear from the bank and the foreclosed on mortgagors attorney about a face to face meeting. However, with that being said in 24 CFR § 203.604 - Contact with the mortgagor, there is a stipulation that says a face-to-face meeting is not required if a reasonable effort to arrange the face to face meeting is unsuccessful and that is detailed below.

"A reasonable effort to arrange a face-to-face meeting with the mortgagor shall consist at a minimum of one letter sent to the mortgagor certified by the Postal Service as having been dispatched. Such a reasonable effort to arrange a face-to-face meeting shall also include at least one trip to see the mortgagor at the mortgaged property, unless the mortgaged property is more than 200 miles from the mortgagee, its servicer, or a branch office of either, or it is known that the mortgagor is not residing in the mortgaged property."

So, now we have the "letter sent to the mortgagor certified by the Postal Service". In addition, the mortgaged property is more than 200 miles from the mortgagee, its servicer, or a branch office. 

This tells me that it was done correctly. With that being said, I am not an attorney nor a judge and I understand my determination holds no weight however, how can the attorneys/court system comfortably take this long to check what seems to be such an simple matter. The case was originally brought up in district/housing court then it was suggested that it be tried in federal a month later where it was determined that no in fact it should be heard in district. Two months later at our next court hearing in district court they determined they made a mistake and it should actually be heard in federal court and the next hearing will be 120 days out. 

I am losing my mind trying to make sense out of how the bank can take our money for the house which relieve's them from the burden of holding it. My attorney is getting paid and it seems like they are not doing anything to help me at this point as the eviction is on hold and the current court case is between the bank and previous owner. The previous owner is living for free in a house that I own, pay the water bill, insurance and property tax on but, at the same time the court has not confirmed that I actually own the property??? Also, the previous owners have not made a mortgage payment since late 2018. 

It seems like the previous owner knows that they will not win but, has found a way to prolong their eviction through this foreclosure challenge. 

I feel like there has to be a better way to handle this matter in regards to the court system. 

Furthermore, if anyone has any suggestions on how I can best move forward from here please share them with me. I feel like I am stuck with no options but, with my lack of knowledge in the legal world mixed with a willingness to find a solution I would love to think there is something I can do that I have not done yet. Please share some ideas with me.

It seems like everyone is content with how terrible this matter is being handled besides me. 




You say that your attorney is getting paid. What does the attorney have to say about this? Are they representing YOU or the bank against the former owner? Did you get title insurance when you purchased the property? If so did you reach out to them?

It's not clear if you started an eviction or not. If you did and it is open or on hold, you should talk to your attorney about possibly making a motion in the eviction case for the occupant to pay "use and occupancy". 

Part of the problem is that you bought it just as COVID hit and the rules were altered "temporarily" until I think April 2022 at least.

Assuming you received a title policy, I suggest you immediately file a claim with the insurer and not the title agent which issued the policy.  I believe Xome owns a title agency so unless you retained your own title agent you probably received one from Xome's related entity.  I'd also look at the policy and see if it has an exception for matters related to the foreclosure.  If it does there's a possibility the claim will be denied as the matter is excepted from coverage.  If there is an exception I would probably retain an attorney even while waiting for a decision from the insurer.

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My attorney is working for me on the eviction that has been paused and like everyone else I have talked to she is saying that "This is the risk I signed up for". it just seems like everyone is content with this scenario. I on the other hand do not think it is fair for someone who has been foreclosed on to simply find a loophole and say they never had a face to face conversation with the bank to rectify their mortgage. This can be as simple as the bank saying actual yes we did try to have a face to face but nobody was home. However, in the meantime I will end up waiting over a year for the bank and the foreclosed upon mortgagee to even dispute this in court. This should have been figured out before the bank originally foreclose on them and took ownership, not after the bank sells the property to me. Even with that being said it should not take this long in court to determine the validity. However, until their case is finished, my eviction case is on pause. This just sets a horrible precedent that makes it unfavorable for investors to pursue these properties. It also creates more work for the courts.  

The bank has their own attorney too. The way this unfolded was as follows. I bought the house through xome from the bank. I brought the previous owners that still occupied the house to court to evict them. The previous owners put that case on pause and brought the bank to court to challenge the validity of the foreclosure (Something they could have done anytime in the past 2 years since they were originally foreclosed on and the bank took ownership). During the bank Vs Mortgagee court case we have had 3 court appearances in the last 6 months just to determine where this case should be tried (District vs Superior, These were detailed in my original post). 

I was unable to obtain title insurance because the previous owners are still in the property. Have you heard of any title insurance companies that would insure a property in this scenario? if so, I would love to learn more. 


This whole situation has been an incredible eye opener. Although it is a great learning experience I still see areas that should be fixed and I find it amazing that nobody else agrees. Mainly the whole idea of a bank being able to foreclose on a property/debt that they are not getting paid on, sell that property to me to clear themselves from the less then desirable situation and then we find out that the foreclosure might not have been done right but, in the meantime my hard earned money that I have saved up my whole life and the equity I have built in my primary property (Heloc) to be in a situation where I could buy a house cash is locked up in a legal loophole but I still have to pay the water bill, property taxes, interest on my heloc all the while the person who has not paid their mortgage for the last 2 years gets rewarded by not having to pay it for another year. I am clearly ranting now, but meanwhile the foreclosed upon occupants are traveling around the world which I have been sadly following through my frequent check ins via FB. This could all be avoided if the original foreclosure process checked everything it needed to check to actually move forward with a valid foreclosure.

Also, covid may have played a part in this one way or another but, they were foreclosed on precovid. Neither the eviction or foreclosure validity case has brought covid into the matter yet. We are still just trying to determine if the foreclosure was done right.

Thank you both for your response. Peter, Unfortunately I have not found a company that would provide title insurance for me on this property. The explanation I have received is that they do not insure properties that are still occupied by the previous owners. If you have heard otherwise please share.

To paraphrase an old saying, one man's loophole is another man's valid defense under the law.  You should have been able to purchase a title policy but it probably would have contained an exception for parties in possession.  If so the title insurer wouldn't have liability for this matter in all likelihood.  As you've been already told, this is a risk you signed up for when you purchased property knowing there was someone in possession.  Unfortunately many investors assume evicting someone is a fast easy process but as you're finding out, that's not always the case.  MA is a particularly complex state and court interpretations of foreclosure statutes evolve.  As you'll read in the attached link the process can take years.  

Massachusetts Homeowner Successfully Reverses Foreclosure Judgment on Appeal — Massachusetts Real Estate Lawyer Blog — June 11, 2018 (massachusettsrealestatelawyer-blog.com)

Originally posted by @Kevin Garabedian :

Thank you both for your response. Peter, Unfortunately I have not found a company that would provide title insurance for me on this property. The explanation I have received is that they do not insure properties that are still occupied by the previous owners. If you have heard otherwise please share.

I've seen many policies issued in your situation but as I wrote below, the policy would probably have an exception for the matter so it wouldn't have helped in your case.

Originally posted by @Peter Walther :
Originally posted by @Kevin Garabedian:

Thank you both for your response. Peter, Unfortunately I have not found a company that would provide title insurance for me on this property. The explanation I have received is that they do not insure properties that are still occupied by the previous owners. If you have heard otherwise please share.

I've seen many policies issued in your situation but as I wrote below, the policy would probably have an exception for the matter so it wouldn't have helped in your case.

Peter is the title expert in this situation..  I know as a Mortgage banker and one that has to do CE each and every year.. the Face to face meeting is talked about every year in CE.. its mandatory .. so its not a loop hole.. not sure how this unravels but just commenting on the face to face meeting that is law and it has to be with a decision maker from the lender..  If the borrower does not respond or never goes to the meeting then that requirement is done.. but if they were never offered it.. then that is an issue. 

Also there is other options if the bank does not conduct a face to face. One being that the bank can send a certified letter to them detailing their options. During the due diligence process before I bought the house we requested and received this letter from the bank to determine it was foreclosed properly. 

I could be wrong  but, I feel confident that eventually I will gain ownership of this home. If not, I am ok with that as well. However, the time it takes to determine if it was in fact a valid foreclosure does not seem right. Especially when they could set a process that addresses this, in order to actually foreclose on someone, instead of finding it out after they allow a foreclosure to go through

Originally posted by @Kevin Garabedian :

And that is fine with me Jay. My issue is with this not being determined before the bank foreclosed on them. If it affects the validity of the foreclosure it should be addressed before they foreclose. 

Anytime you buy property with a party in possession (PIP) you run a risk of a defense to the eviction being raised.

I worked on on title claim where the PIP produced a lease which claimed he prepaid five years of rent to the former owner.  The claim appeared to be bogus but I ultimately authorized paying $12k to him to get him out of the property.  That happened after 18 months of litigation during which the insure/investor hadn't received rent yet had to pay his mortgage, insurance and taxes which wasn't recoverable under the policy.  The insured didn't like that so he hired an attorney and spent $5k which resulted in me successfully demonstrating to the attorney why his client wasn't entitled to reimbursement.

Long story short, be sure you to understand the risks when buying property with a PIP.

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Peter, I think you are failing to realize that we are not discussing the eviction, that is currently on hold. The foreclosure validity and the current process used to establish it is the focal point here. I have factored in a regular eviction and I am 100% ok with that. What infuriates me is that everyone I talk to is content with the current legal process allowing a bank to foreclose on someone without checking if they did it the right way. Not one person has said wow that is a little backwards. Everyone takes the easy way out and says that's the risk you take with these investments. OK Cool however, that doesn't mean it shouldn't be fixed in the future. I would love to hear someone explain why a bank is allowed to foreclose without someone checking if they did everything they need to do in order to properly foreclose on someone. Imagine all of the people they wrongfully foreclosed on...  I'm a reasonable person. I might have purchased a house from someone in that situation... That is ok with me but, now that I learned about this I have seen where the process is broken and it should be addressed. 

How can changing the process from allowing a bank to foreclose without determining if they did everything they need to do in order to properly foreclose to allowing a bank to foreclose only if they have proven that they have done everything they need to do in order to foreclose hurt anyone? This seems like it should be a pretty simple thing to do. It seems like the right thing to do.

Also, the evidence to determine if the foreclosure was done properly is either found and ready to be presented by now or it will never be found. Lets just speed up the court process to see if it was a valid foreclosure or not. If not, let them keep the home and remove the stress from the PIPs life. If it was properly done cool, lets get the eviction process going. No need to take a year or more to determine this. It is unbelievably hard to just sit back thinking that both sides (Bank and PIP) have all the evidence they will ever have but, we still have to wait a year or more to go through the process and get a ruling from the court. 

I think the issue here is that you seem have a fundamental misunderstanding of what the courts are responsible for.

The courts (judges) are non-biased interpreters of fact and law (findings of fact, conclusions of law).   They are not quality control.   When the bank foreclosed, it is not the court's responsibility to double check their work, especially if it was uncontested.   The bank was required to attest that they followed all the rules and the bank said yes.   In fact I bet the bank is still saying yes.    The other party in this matter is now saying no, and has to prove that in court.  The judge only gets involved if there is a dispute, in the original foreclosure there was no adverse party so there was no opposing viewpoint.   The judge can't look at the bank paperwork and say "hey, you did not do your face to face meeting, no foreclosure".   That would not be acting as a lawyer for the other side.  That is the definition of bias.   And nothing you have said convinces me the bank was wrong.  If they prevail in the lawsuit everything they did will be vindicated.  And the former owner has their rights under the law to challenge it.   

You took a risk and bought a foreclosed home with the previous owner still in place.   You thought you accounted for all the risk (eviction) but did not consider an appeal to the foreclosure.   You stated yourself you did enough due diligence you were comfortable the foreclosure was valid.   So you considered that risk.    So now that the risk is realized I can understand why you are upset, but you can't claim it was an unknown risk.   

It seems like your real problem is that the 1+ year it is going to take to resolve this and the fact you can't influence that timeline.  You say the matter is being handled "terribly" but I just don't see it.   Seems like everyone is doing their job here and the known risk you took buying the property was realized.   I am not criticizing, I understand why you would be frustrated, I just don't see why you think anyone is not handling this properly?

John, very well said. I appreciate you taking the time to analyze my situation and share your response. SO to be honest I do not know where to direct my frustration but, it seems like you at least get why I am frustrated. Maybe my problem is not with the courts. But ultimately what I am trying to say is if someone is foreclosed on there should be some system in place to make sure that they actually deserve to be foreclosed on. A system that would not allow someone to challenge the validity because it has already been established that it was a valid foreclosure. Yes, I understand the courts are biased. Yes, I understand I took a risk. Forget my understanding of the courts. Forget me describing it being handled terribly. Yes, everyone may be doing there job but, if that is so, whos job is it to determine if the property was properly foreclosed in the first place? Can a bank just foreclose on anyone at anytime? No, there are rules that need to be followed. Who determines these rules are being followed and then allows the foreclosure to happen? That person clearly is not doing there job or is missing from the equation. Now, I am in court trying to figure out if it was actually foreclosed properly. I am not as familiar with all the roles and responsibilities, and you may be able to pick apart my words but, I think you see what I am getting at here. Seeing how houses can be foreclosed on and left in this situation, why not establish a system that determines this before hand to prevent it from getting this far? 

Imagine a world where the bank does everything properly, someone challenges the foreclosure, and instead of meeting in court a year later there is someone that says not so fast mr previous owner you can not do that because we have a process in place that does not allow a Bank to move forward with a foreclose unless it has been done properly and everything has been documented to prevent this problem from occurring. So whatever you are challenging we have the answer to it already and here it is for you to view. Or sorry mr bank you can not proceed with the foreclosure because so and so has not been done yet. 

Who ultimately gives the bank the power to foreclose?

Also, even the current situation I am in right now would not be so bad if there was not so much time in between court cases stretching the whole process out. the previous owners attorney initially met with us in district court where it was determined that the court should be tried in superior court against the bank. Then I think a month later in superior court it was determined that the court should be heard in district court. then maybe two months later in district court it was determined that they were wrong and this case will in fact be heard in superior court 4 months out. Come on now.

I am ok with being frustrated about this but, I just cant agree with someone who says that there is not room for improvement with how these situations can be handled.

@Kevin Garabedian based on the time line, it seems this foreclosure was being disputed when the foreclosure moratorium was put in place and courts were closed in many places for over a year. They could argue that due to COVID, there was no way to remedy this sooner. 

Can you sue the bank to get your money back, since the court is basically saying they had an illegal foreclosure? Can you put a lien on the house for the purchase price and the taxes owed, so if the original owner regains ownership, they can't sell it without you getting paid? 

I have heard of things like this. There was someone in the forums a few years back that talked about fighting in court for years. Some of these people know they will eventually lose, but they just use stall tactics to wear you down or live for free.

Joe, thanks for commenting. So... I have documents from the bank that date back to November of 2018. These are "90 Day Right to Cure" docs that the bank sent certified and first class mail to them. Then another piece of certified mail November 2019 that states "You are hereby notified of the intention of ABC Mortgage Services, LLC to foreclose by sale under the
power of sale contained in a certain mortgage". The bank eventually foreclosed on them and took ownership Feb 2020. So covid did not prevent them from originally missing their mortgage payments. However, yes, covid was just starting to kick off when they bank took ownership early 2020. 

I do not know if I can sue or put a lien on the house. I was hoping the BP community would comment with some creative options rather than point out "Thats the risk you took". 

I have researched many similar cases in Massachusetts and RI. Both states seem to handle it the same way. The courts end up ruling that the bank did in fact foreclose properly in most cases but there are some instances where the judgement is in favor of the previous owner. Overall, from the research I have done and interactions I have had with this particular couple who have been foreclosed on, I am as close to certain that they know they were foreclosed on properly and drawing it out as long as they can.

Originally posted by @Kevin Garabedian :

John, very well said. I appreciate you taking the time to analyze my situation and share your response. SO to be honest I do not know where to direct my frustration but, it seems like you at least get why I am frustrated. Maybe my problem is not with the courts. But ultimately what I am trying to say is if someone is foreclosed on there should be some system in place to make sure that they actually deserve to be foreclosed on. A system that would not allow someone to challenge the validity because it has already been established that it was a valid foreclosure. Yes, I understand the courts are biased. Yes, I understand I took a risk. Forget my understanding of the courts. Forget me describing it being handled terribly. Yes, everyone may be doing there job but, if that is so, whos job is it to determine if the property was properly foreclosed in the first place? Can a bank just foreclose on anyone at anytime? No, there are rules that need to be followed. Who determines these rules are being followed and then allows the foreclosure to happen? That person clearly is not doing there job or is missing from the equation. Now, I am in court trying to figure out if it was actually foreclosed properly. I am not as familiar with all the roles and responsibilities, and you may be able to pick apart my words but, I think you see what I am getting at here. Seeing how houses can be foreclosed on and left in this situation, why not establish a system that determines this before hand to prevent it from getting this far? 

Imagine a world where the bank does everything properly, someone challenges the foreclosure, and instead of meeting in court a year later there is someone that says not so fast mr previous owner you can not do that because we have a process in place that does not allow a Bank to move forward with a foreclose unless it has been done properly and everything has been documented to prevent this problem from occurring. So whatever you are challenging we have the answer to it already and here it is for you to view. Or sorry mr bank you can not proceed with the foreclosure because so and so has not been done yet. 

Who ultimately gives the bank the power to foreclose?

Also, even the current situation I am in right now would not be so bad if there was not so much time in between court cases stretching the whole process out. the previous owners attorney initially met with us in district court where it was determined that the court should be tried in superior court against the bank. Then I think a month later in superior court it was determined that the court should be heard in district court. then maybe two months later in district court it was determined that they were wrong and this case will in fact be heard in superior court 4 months out. Come on now.

I am ok with being frustrated about this but, I just cant agree with someone who says that there is not room for improvement with how these situations can be handled.

 The fact is you can look at the court record as much as you want and come to a conclusion as to whether you think the foreclosure was done properly or not and it really doesn't matter a wit.  No ones opinion on the quality of the foreclosure matters, except a Court of competent jurisdiction and even that Court's opinion is subject to appeal.  Not to scare you, but here's an article about a foreclosure in NY that may have finally ended, after 23 years.  

Judge moves to evict LI man who hasn't paid mortgage in 23 years (nypost.com)

Unfortunately I believe there isn't anyone on BP or any other forum that will have a silver bullet that will slay your beast.  And to answer one of your other questions, during the last financial crises, lenders were accused of and proven to be, foreclosing on wrong people, wrong property and wrong mortgages.  There were thousands of wrongful foreclosures.  

Ocwen Financial Faces Boatloads of Complaints | Courthouse News Service



To me it sounds like the former owners are trying to vacate the judgment or order ratifying the sale. That’s a high bar... it requires fraud, new evidence, etc. Check MA law on the standard. 

The procedural issue they are now arguing should have been raised before the sale was ratified, IMO. Good luck. 

Originally posted by @Tom Gimer :

To me it sounds like the former owners are trying to vacate the judgment or order ratifying the sale. That’s a high bar... it requires fraud, new evidence, etc. Check MA law on the standard. 

The procedural issue they are now arguing should have been raised before the sale was ratified, IMO. Good luck. 

I was just reading today an appellate court opinion here in Illinois where someone purchased a 2nd mortgage w/o realizing a 1st existed, then tried to reverse the CONFIRMED sale after subsequent auction on foreclosure of the 1st for a myriad of reasons, and then sued his attorney for malpractice: https://ilcourtsaudio.blob.cor...

As part of the legal malpractice claim against his lawyer, the plaintiff (2nd mtg buyer) stated, "that Gooch also “negligently failed to stay the final judgment of sale during appeal, resulting in dismissal of the appeal in October 2015 as moot because no remedy remained available to reverse the sale to a third-party purchaser."

I imagine/hope that'll be the case here. The mortgagor had the opportunity to raise these points before the sale was confirmed by the court, so he should be bared from reversing it now on those same grounds. But I'm no lawyer :-).