Mortgage in Default Not Enough for Try Title Action

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The First Circuit has held that, under Massachusetts law, a mortgagee’s interest in a mortgage in default is inadequate to state a claim under the Massachusetts try title statute. The Plaintiffs in Lemelson, et al. v. U.S. Bank, N.A. filed suit under the Massachusetts try title statute, asserting that U.S. Bank’s interest in the property as mortgagee constituted a adverse claim on their record title to the property.

Plaintiffs argued that their record title and possession of the property were adequate to state a claim under the try title statute. The First Circuit dismissed this argument, noting that while possession and record title are necessary for standing to bring a try title action, they are not adequate to state a claim. A claim under the try title statute requires that an adverse claim, or the possibility thereof, cloud a plaintiff’s record title. Relying on the Supreme Judicial Court’s decision in Bevilacqua v. Rodriguez, 955 N.E.2d 884 (Mass. 2011), the First Circuit agreed with the district court that a mortgagee’s holding of legal title to the property is not an adverse claim clouding the Plaintiffs’ record and equitable title in the property.

Under the Massachusetts title theory of mortgage law, title to the property is split into equitable title, retained by the mortgagor, and legal title, held by the mortgagee to secure the underlying debt. Under this system, the mortgagor’s and mortgagee’s interests are consistent with each other, and without more cannot serve as adverse claims clouding title. “Because Lemelson concedes that he conveyed all legal title to the property, he cannot now commence a try title action against one asserting ownership of only that legal title.”

In the First Circuit, a mortgagee’s interest in the legal title, without more, is simply not sufficient to support an action under the Massachusetts try title statue.

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