The Massachusetts Supreme Judicial Court has rejected a plaintiff’s “show me the note” argument and vacated a preliminary injunction against the defendant. Plaintiff sought a preliminary injunction against defendant, a mortgage servicer, challenging the foreclosure of her home and the subsequent eviction action on the grounds that defendant held only the mortgage and not the underlying note.
The lower court issued a preliminary injunction preventing defendant from proceeding with the eviction, holding that plaintiff’s argument—that for a valid foreclosure sale to occur under Massachusetts law, the foreclosing party must hold both the mortgage and the underlying note—would likely be successful. The Supreme Judicial Court rejected that argument. Construing the term “mortgagee” to mean the person holding the mortgage and either holding the underlying note or acting on behalf of the note holder, the Court held that physical possession of the mortgage note is not a condition precedent to effecting a valid foreclosure. The Court limited its decision to (1) the interpretation of “mortgagee”; (2) foreclosures under the power of sale; and (3) to sales where the statutorily required notice of sale is provided after the date of the decision. The decision provides relief for mortgage servicers who initiate foreclosure proceedings on behalf of the holders of the note (i.e., lenders).