An Evolving Foreclosure Landscape: The Ibanez Case and Beyond

ACS is pleased to distribute “An Evolving Foreclosure Landscape: The Ibanez Case and Beyond,” an Issue Brief by Peter Pitegoff, Dean and Professor at the University of Maine School of Law, and Laura Underkuffler, J. DuPratt White Professor of Law at Cornell University Law School. In this Issue Brief, the authors address criticism from the mortgage industry of several recent state court decisions invalidating foreclosures. Professors Pitegoff and Underkuffler contend:

[T]he decisions in these cases are not extreme examples of judicial hyper-technicality run amok. Rather, they are attempts to address the radically new foreclosure realities in the age of mortgage securitization and subprime lending – realities that existing laws, on many levels, are inadequate to address.

The authors analyze the holdings in several recent cases that dismissed foreclosure actions for failure to provide adequate documentation, including a widely publicized Massachusetts case, U.S. Bank National Ass’n v. Ibanez. While the reasons for dismissal in these cases may appear “highly technical,” Pitegoff and Underkuffler explain, they are nonetheless crucial to ensuring that the burden of proof in foreclosure actions remains on the foreclosing party, that contracts involving housing are treated with a care that matches their societal importance, and that courts are more than just “automatons mindlessly processing paper motions in mortgage foreclosure actions.” “Neither Ibanez, nor any of the other cases discussed here, forbids mortgage securitization, multiple mortgage and note assignments, or other complex real estate financing transactions,” the authors write. Professors Pitegoff and Underkuffler conclude, “The issue is not the blanket forbidding of complex transactions; it is the protection of all rights, including those of the property owner, when default and foreclosure are claimed.”

Read the full Issue Brief: An Evolving Foreclosure Landscape: The Ibanez Case and Beyond