10 Apr Massachusetts Courts Split Hairs On Who May Seek Stay Relief
When a mortgage goes unpaid, a party can seek relief from bankruptcy’s automatic stay to foreclose. A mortgage can held by a lender, administered by a servicer, and ownedby a nominee commonly called MERS (Mortgage Electronic Recording Service). All three have the right to go to bankruptcy court for relief from the stay.In re Huggins, 357 B.R. 180 (Bankr. D. Mass. 2006) (if MERS),Saffran v. Novastar Mortgage, Inc., 2007 U.S. Dist. LEXIS 96306, (if lender despite MERS as nominee). Servicers have standing under the servicing agreement, although there is no published Massachusetts decision on this.
Let’s make this more complex. Money moves faster than paper in Wall Street, because it moves electronically. If the original mortgage holder received money from another to sell the mortgage but did not sign an actual mortgage assignment, can the buyer seek relief from stay to foreclose? No.In re Maisel, 378 B.R. 19 (2007).
Got this? There’s a test on it tomorrow morning.
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