In Eaton I, the Supreme Judicial Court concluded that where a mortgagee acts with the authority and on behalf of the note holder, the mortgagee may comply with the statutory requirements governing mortgage foreclosure by sale without physically possessing or actually holding the mortgage note.
Green Tree Servicing, LLC (Green Tree), foreclosed on a home, exercising the power of sale contained in her mortgage. Green Tree, acting as servicer for Federal National Mortgage Association (Fannie Mae), offered the highest bid at the auction. As Green Tree's assignee, Fannie Mae purchased the property and then brought an eviction action in Housing Court. On the theory that the foreclosure was void because Green Tree did not hold the mortgage note at the time of the foreclosure sale, the mortgagee brought her own declaratory judgment action in Superior Court. The Superior Court entered a summary judgment for Fannie Mae and Green Tree.
Was the summary judgment proper?
Summary judgment was properly granted to a loan servicer and mortgagee in their foreclosure action because there was competent affidavit evidence that the mortgagee had physical possession of the promissory note at the time of the foreclosure, and no countervailing evidence was offered by the mortgagor. The mortgagee's predecessor's pre-foreclosure right to cure notice strictly complied with the terms of her mortgage because it provided the amount of the default, how to cure it, the deadline for curing the default, and the potential consequences for failing to do so. However, a genuine issue of fact existed as to whether the predecessor was authorized to send the notice to the mortgagor, as the mortgage required the "lender" to give the notice of the right to cure and the mortgagee did not provide competent evidence that its predecessor acted as its agent. That matter was remanded for further proceedings.