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Right-to-Cure Notice Naming Mortgage Servicer Deemed Effective

Naming a mortgage servicer as mortgagee on a statutory right-to-cure notice satisfies the requirements of the Commonwealth's pre-foreclosure right-to-cure statute, according to a recent decision of the Appeals Court.

In Haskins v. Deutsche Bank National Trust Co, 86 Mass. App. Ct. 632 (2014), the Appeals Court considered whether naming a mortgage servicer in a so-called "Section 35A notice" satisfies the requirement found in G.L. c. 244, ยง 35A that such notices include "the name and address of the mortgagee, or anyone holding thereunder."

The Court, with Justice Mark V. Green writing, reasoned that to accomplish the purpose of providing a mortgagor with a fair opportunity to cure a default prior to foreclosure, "the statutory notice is designed to provide the mortgagor with the information necessary to contact the party who holds all relevant information about the loan (including balances, payment history and overdue payment amounts), and who holds authority to make decisions or otherwise take action to allow the mortgagor to cure any default, pay off the loan balance by means of a sale or refinancing, or undertake discussions of possible modification of the loan."  "In the circumstances of loans such as the one here, that party is the mortgage servicer."

In its decision, the Court also "extend[ed] substantial deference" to a Division of Banks regulation promulgated pursuant to Section 35A(h) of the statute, which regulation includes mortgage servicers within the definition of "mortgagees."

The "upshot" of the case is that Section 35A notices will not be held invalid merely because they include only the name of the servicer and not the name of the actual mortgagee.

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