Try Title Action May Be Available Against Mortgagees, Or Not

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A decision from the Land Court has muddied the waters regarding whether a mortgagor can raise a claim under the Massachusetts try title statute against a mortgagee. A 2012 Land Court decision by Judge Robert B. Foster found that the try title statute was unavailable to a mortgagor prior to foreclosure. In Abate v. Fremont Investment & Loan, et al., Judge Foster found that until foreclosure, during which the mortgagor’s equitable title is extinguished, the mortgagor and mortgagee hold complementary equitable and legal title to the property, and have no adverse claims. The First Circuit reached a similar decision in July in Lemelson, et al. v. U.S. National Bank Association.

While acknowledging the Abate and Lemelson decisions, Judge Gordon H. Piper disagreed and found that a mortgagor could bring a try title action to force a bank or other purported mortgage holder to prove that its acquisition of the mortgage was valid. Varian, et al. v. Bank of New York Mellon, et al. Judge Piper disagreed with the Abate and Lemelson analyses, finding that those decisions assumed that the defendant was in fact the mortgagee. Should the bank not be the valid holder of the mortgage, its claim to be such would place its claimed title in an adverse position to the legal title of the mortgagor.

The status of try title suits brought by mortgagors prior to foreclosure is now very uncertain Massachusetts. The First Circuit’s Lemelson decision precludes such suits in federal court, while the conflicting Abate and Varian decisions both remain persuasive, albeit not precedential, law in the state courts. The Abate case is currently pending in the Appeals Court, but until such time as the Appeals Court issues a decision, the availability of such suits in state courts remains in doubt.

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