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Massachusetts rank: 28 90+ Day Delinquency Rate Foreclosure Rate March 2013 3.6% Unemployment Rate 2.4% 6.4% year ago 3.4% 2.6% 6.6% year-over-year change 6.8% -5.1% -3.0% Top County HaMpden CounTy 90+ Day Delinquency Rate Foreclosure Rate March 2013 5.9% 3.9% year ago 5.2% 3.7% year-over-year change 12.9% 5.7% Top Core-Based Statistical area piTTSfield, Ma 90+ Day Delinquency Rate Foreclosure Rate March 2013 4.3% 3.7% year ago 3.6% 4.1% year-over-year change 18.2% -10.8% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the March 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary March 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of LPS Applied Analytics. FROM THE BENCH A Threshold Issue: Massachusetts' Highest Court Addresses Standing And so it begins . . . or does it? What exactly does it take to establish standing to initiate foreclosure in Massachusetts? This was the once simple, and now complex, question considered in the latest in a series of Supreme Judicial Court (SJC) decisions redefining our understanding of the law— HSBC Bank USA, N.A., v. Jodi B. Matt, SJC-11101 (January 14, 2013). Massachusetts foreclosure is seemingly unlike any other, a piecemeal, de facto, three-part process some call "quasi-judicial" that includes (1) a statutory 150-day Notice of Right to Cure, (2) a judicial "servicemember action" to determine whether the homeowner is entitled to protection under the Servicemembers Civil Relief Act (SCRA), and (3) a non-judicial sale process. Most are already familiar with the SJC decision addressing the non-judicial sale 94 stage: U.S. Bank, N.A., vs. Ibanez, 458 Mass. 637 (2011), requiring the entity noticing a foreclosure sale to actually hold the mortgage, and Eaton vs. Fed. Nat'l Mortg. Ass'n, 462 Mass. 569 (2012), requiring the very same foreclosing party to also hold the note, or act as the holder's "authorized agent" when sending an auction notice. Simple? Think again. Before even reaching Ibanez and Eaton, a mortgagee must first address a crucial threshold issue: Is the homeowner entitled to SCRA protection? Under Massachusetts law, a servicemember action judgment effectively provides mortgagees and buyers a "safeharbor" from subsequent SCRA challenge by judicially determining a homeowner's military status. However, a foreclosing entity must first satisfy yet another crucial threshold inquiry: Does it have standing to commence a servicemember action? On January 27, 2010, HSBC filed a servicemember action against homeowner Jodi Matt, claiming mortgagee status under a 2007 assignment. Although admittedly not entitled to SCRA protection, Matt nonetheless challenged standing. Rather than relying on the recorded assignment, Land Court Judge Keith Long (yes, the same Judge Long, author of the original Land Court Ibanez opinion) inexplicably chose to rely on "general requirements of standing," holding that the 2005 pooling and servicing agreement conveyed standing regardless of whether HSBC was the actual mortgage holder. Matt appealed. The SJC transferred the case directly from the Appeals Court. On January 14, the SJC ruled with consistent familiarity. Judge Lenk first noted that the Land Court should not have entertained Matt's challenge without claim to SCRA protection. Thereafter the SJC, while citing repeatedly to Eaton, stated, "Going forward, to establish standing in servicemember proceedings, plaintiffs must present such evidence as may be necessary and appropriate in the circumstances reasonably to satisfy the judge as to their status as mortgagees or agents thereof," effectively applying Eaton and Ibanez earlier in the foreclosure timeline. The court thereafter remanded the matter for determination of HSBC's mortgagee status. Practically speaking, Matt raises many concerns. What constitutes "such evidence as may be necessary and appropriate" is open for debate where even a recorded mortgage assignment was insufficient to establish standing. How will Matt affect those entities and investors who hold a promissory note but who refuse to foreclose the mortgage in their own name? In the future, how much earlier in the foreclosure process might Eaton/Ibanez/Matt be applied? Will courts demand evidence of note and mortgage holder unity prior even to mailing of the Notice of Right to Cure? If so, can servicers and investors comply at such an early stage? Massachusetts courts are already now focusing on the initial stage, voiding entire foreclosures due to questionable deficiencies in the Notice and mandating "strict compliance" per Ibanez. The course has been set; we can see the direction in which the SJC is headed. Perhaps the most germane question is not whether the SJC will require standing to be established earlier, but when. Will there be a threshold issue, to a threshold issue, to a threshold issue? This "From the Bench" article was contributed by Allison Orprilla, Esq., and Peter Guaetta, Esq., of Guaetta and Benson, LLC, in Chelmsford, Massachusetts. IN THE NEWS Bay State Home Sales Decline in March, Foreclosures Plunge While other states spent March gearing up for a busy spring season, Massachusetts saw a decline in sales throughout the month, a Boston-based real estate data firm reported. According to the Warren Group, singlefamily home sales in the Bay State dropped 3.6 percent to 3,100 in March, down from 3,215 last year. It was the second consecutive monthly decrease in Massachusetts home sales. For the entire first quarter, sales totaled 7,849, down 2.1 percent from 8,017 in 2012's first quarter. "Low inventory is plaguing housing markets all over the country, and Massachusetts is no exception," said David Harris, editorial director at the Warren Group. "With mortgage rates low and prices competitive, we're hopeful more sellers will emerge and the trend in dropping home sales will reverse." Still, the Warren Group pointed out in its report, March home sales were the highest in any month so far this year. The median price for single-family homes sold in the state during the month of March rose more than 8 percent, reaching $285,000, up from $263,000 a year earlier. According to the Warren Group, it was the sixth consecutive month that home prices have increased year-over-year. The first-quarter median selling price was $282,500, a 10.6 percent increase from $255,500 for the same period in 2012.

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