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Statute of Frauds

Oral agreement to buy property does not create a compensable property interest when the property is condemned

The Nebraska Supreme Court ruled that a potential buyer who had an oral contract to buy real estate did not have a right to just compensation when the property was condemned by public authorities. American Central City, Inc. v. Joint Antelope Valley Auth., 2011 WL 2420787 (Neb. 2011). Although oral agreements to buy property are enforceable despite the statute of frauds in cases of part performance, the Nebraska Supreme Court ruled that the potential buyer's sole remedy was against the seller of the...

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Register of Deeds in Essex County, Massachusetts refuses to record robo-signed documents

A dispute has arisen between South Essex Register of Deeds John O'Brien and the Massachusetts Real Estate Bar Association (REBA) over O'Brien's refusal to allow seemingly "robo-signed" mortgage documents to be recorded in the Registry of Deeds. REBA contends that state law allows the recording of any document "purporting" to be signed by an authorized signatory to a mortgage or a mortgage assignment. Mass. Gen. Laws ch. 183, § 54B. But Register O'Brien points to 1,300 documents received that were signed "Linda Green" but which exhibit different handwriting styles and different titles, and...

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Bank cannot suggest a homeowner stop mortgage payments as part of modification negotiations and then foreclose on the basis of that failure to pay

A federal District Court judge in Massachusetts has ruled in the case of Dixon v. Wells Fargo Bank, 2011 WL 2945795 (D. Mass. 2011), that a ban cannot induce a homeowner to stop making mortgage payments as a prerequisite to negotiations to modify the mortgage and then use that failure to make the mortgage payments as a predicate for foreclosing on the property and evicting the owner. The bank's representation that it would renegotiate following the borrower's cessation of mortgage...

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Massachusetts high court denies eviction from a home foreclosed in a private sale unless there is proof of a right to foreclose

In an extension of its earlier ruling in U.S. Bank Nat'l Ass'n v. Ibanez, 941 N.E.2d 40 (Mass. 2011) that a foreclosure is invalid unless the party seeking foreclosure proves that it owns the mortgage (has the right to foreclose) at the time of the foreclosure, the Supreme Judicial Court of the Commonwealth of Massachusetts ruled in the case of...

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NY court holds that MERS cannot bring foreclosure actions

An appellate court in New York has held that MERS (Mortgage Electronic Registration Systems) cannot file foreclosure lawsuits in its own name because it does not "own" the mortgage, having neither the right to payment under the note nor the right to foreclose. Bank of N.Y. v. Silverberg, 2011 WL 2279723 (N.Y. App. Div. 2011). Despite the fact that the parties put MERS's name on the mortgage, it is not the real party in interest, having no right to payment under the note

NY and Delaware AGs investigate mortgage bundling for requisite written documentation of the chain of title

The New York and Delaware Attorneys General have asked for information from two trustees of mortgage bundles (Bank of New York Mellon and Deutsche Bank) to determine whether they complied with all contractual obligations in the process of bundling the mortgages and selling shares to investors. The trusts that bundled the mortgages were supposed to ensure that proper paperwork was completed in transferring "ownership" of  the mortgages to the trust to ensure that the investors were actually investing in something that the trust owned. Many of the bundling contracts required the trust...

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Washington Supreme Court adopts relative hardship doctrine and refuses to order a house removed when it was unwittingly built on land owned by another

Defendants unknowingly built their house on land that belonged to the plaintiff who also did not know that the land belonged to him. The mistake was discovered after the house was built and plaintiff sued to eject the trespassers from his land. The Washington Supreme Court denied injunctive relief, adopting the relative hardship doctrine. The court granted plaintiff damages for the value of the land encroached on by his neighbor's structure but denied plaintiff an injunction ordering the structure removed. ...

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Maine Supreme Court denies foreclosure when the lender filed fraudulent affidavits

On May 19, 2011, the Maine Supreme Court denied summary judgment on a foreclosure claim when it found that affidavits filed by the lender were suspect and possibly fraudulent. HSBC Mortgage Services, Inc. v. Murphy, 2011 Me. LEXIS 59, 2011 ME 59 (Me. 2011). The question was whether the note had been validly assigned from the original lender to the entity now seeking to foreclose. The court found the affidavits testifying to that effect to be inherently untrustworthy because (1...

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Oral promise to convey land enforceable when promisee builds a home in reliance on the promise

In a straight-forward application of the usual rule, the Maine Supreme Judicial Court recognized an exception to the statute of frauds by enforcing an oral promise to convey land when the promisee relied on the promise and built a house on the land. In this case, the promise was made by parents to their son and daughter. The daughter built a home on the land with the parents' assistance and then asked for a deed to the land. When the parents refused, she sued them seeking a court order to them to transfer title to the land to her and the court granted her request....

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