Khalsa, et al. v. Sovereign Ban, N.A. (Lawyers Weekly No. 11-005-16)
NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us 14-P-1898 Appeals Court GURU JIWAN SINGH KHALSA & another[1] vs. SOVEREIGN BANK, N.A. No. 14-P-1898. Suffolk. November 2, 2015. – January 11, 2016. Present: Milkey, Carhart, & Massing, JJ. Mortgage, Foreclosure, Real estate. Real Property, Mortgage. Negotiable Instruments, Note. Agency, What constitutes. Civil action commenced in the Superior Court Department on January 8, 2013. The case was heard by Robert B. Gordon, J., on motions for summary judgment. James L. Rogal for the defendant. Leonard M. Singer for the plaintiffs. MASSING, J. To effect a valid foreclosure sale, the foreclosing mortgage holder must also hold the underlying note or be acting on behalf of the note holder. Eaton v. Federal Natl. Mort. Assn., 462 Mass. 569, 571 (2012) (Eaton). This appeal requires us to consider how a mortgagee may show that it is acting “as the authorized agent of the note holder,” id. at 586, for summary judgment purposes. On cross motions for summary judgment, a judge of the Superior Court judge entered a declaratory judgment in favor of the plaintiff borrowers, Khalsa and Kaur, and against the defendant mortgagee, Sovereign Bank, N.A. (Sovereign), declaring that the foreclosure sale of the plaintiffs’ residence was void because Sovereign had failed to show that it was acting as the authorized agent of the note holder, Federal Home Loan Mortgage Corporation (Freddie Mac). Sovereign appeals. Because the summary judgment materials create a genuine issue of fact concerning Sovereign’s authorization to foreclose on Freddie Mac’s behalf, we vacate the judgment and remand the case for further proceedings. Background. On April 2, 2008, the plaintiffs executed a promissory note payable to Sovereign in the original principal amount of $ 274,000 to finance the purchase of their home in Millis. To secure the note, the plaintiffs granted Sovereign a mortgage on the property. Shortly thereafter, Freddie Mac purchased the note from Sovereign, retaining Sovereign as servicer of the note and mortgage. On April 22, 2011, Sovereign notified the plaintiffs that they were in default on their loan for nonpayment. Sovereign held a foreclosure sale on January 18, 2013. Although Sovereign held itself out as the “Lender” in the default notice, the note had been indorsed in blank, and at the time of the sale, Freddie Mac had physical possession of the note. See G. L. c. 106, […]