The statute providing borrowers with a right to cure mortgage payment defaults before acceleration and foreclosure can occur imposes no deadline on completion of foreclosure proceedings once commenced, according to two very recent Massachusetts decisions.
G.L. c. 244, § 35A ("Section 35A"), as currently enacted, provides that a mortgagor of residential property shall have a 150-day right to cure a payment default before acceleration of his or her loan. A mortgagor who has cured once, however, is not entitled to a new notice with each successive default. Instead, "[t]he right to cure a default of a required payment shall be granted once during any 3 year period, regardless of mortgage holder." See G.L. c. 244, § 35A(b). Notably, both the version of Section 35A that was effective from May 1, 2008 to August 6, 2010 and the version of the statute that will go into effect on January 1, 2016 require a 90-day right to cure to be granted once during any five year period.
In a July 1, 2015 decision of the Superior Court for Hampshire County, Justice Bertha D. Josephson held squarely that where the mortgagee's power of sale was invoked within five years of the mailing of a Section 35A "right to cure" notice, but the foreclosure was delayed for several years by litigation, the borrowers were not entitled to a new notice before the foreclosure could be completed. Interpreting the version of the statute applicable prior to August 1, 2010, the Court wrote:
There is no expiration on the notice to cure. The defendant correctly maintains that it was not required to essentially restart the foreclosure process because plaintiffs had stalled the proceedings to a point where it was five years after the initial notice. The statute refers to how many chances a borrower has to cure within a five year period, not how often a lender must provide a borrower with the chance to cure. Since plaintiffs did not cure the defect the first time, the defendant['s] contention that they are not entitled to another chance to cure is correct.
Robert A. Boulanger and Another v. Wells Fargo Bank. N.A., Hampshire Superior Court C.A. No. 14-0175, Memorandum of Decision on Defendant's Motion to Dismiss at pp. 3-4 (July 1, 2015) (internal citation omitted).
In ruling that a borrower is not entitled to a new Section 35A notice every five years (or presumably, three years, depending on which version of the statute applies), the Superior Court relied on an unpublished decision of the Appeals Court handed down just a few weeks earlier.
In Cruz v. The Bank of New York Mellon Trust Co., National Association, 2015 WL 3794853 (June 19, 2015), a panel of the Appeals Court stated, "[w]e decline to create an additional requirement (not present in the language of [Section 35A]) that foreclosure proceedings must also be completed within five years of the notice particularly where, as here, there is no allegation that the foreclosing entity was at fault for the delay." Cruz, 2015 WL 3794853 at *2. Moreover, the Appeals Court held, even if it were to impose the requirement sought by the plaintiffs in Cruz, that requirement would be of no assistance to them where they made no allegation that they ever tried or were willing to cure the default at any time. Id. See also, U.S. Bank Nat'l Assn. v. Schumacher, 467 Mass. 421, 433 (2014) (Gants, J., concurring); The Bank of New York Mellon Corp. v. Wain, 85 Mass. App. Ct. 498, 501 (2014) (stating that no relief is available where a foreclosure is challenged on the ground of a defective Section 35A notice unless the defect rendered the foreclosure so fundamentally unfair that the mortgagor is entitled to affirmative equitable relief).