• DYE CULIK PC | Consumer Protection Division

Massachusetts Federal Court Rejects Borrowers’ Foreclosure Lawsuit

foreclosure massachusetts

This case shows the importance both of filing a lawsuit in a timely manner and complying with the relevant legal standards.

First, the homeowners alleged that the loan was entered into as a result of predatory lending, in violation of the Borrower’s Interest statute, Massachusetts General Laws chapter 183, section 28C. This law forbids a lender from making a loan unless certain criteria are established to show that the loan is in the homeowner’s best interest. The homeowners alleged that there were “irregularities” in the signing of the mortgage that should entitle them to damages. The judge however, ruled that because there is a four-year statute of limitations, the claim should be dismissed. The mortgage was signed in 2007 but the lawsuit was filed in 2015, more than four years later.

Second, the borrowers alleged that the foreclosure sale was conducted in violation of one of the foreclosure statutes, Mass. General Laws chapter 244, section 15A. This is a law that Culik Law was able to use to actually void a foreclosure sale. In this case, though, the judge dismissed the claim because of the statute of limitations. This time, there was a three-year statute of limitations on the claim for wrongful foreclosure, but the case was filed more than three years after.

Finally, the borrowers alleged that the bank had violated the Federal Trade Commission Act by committing unfair and deceptive practices. The Federal Trade Commission Act (FTCA) does indeed prohibit such practices, but – importantly here – it does not allow homeowners to file lawsuits if it is violated. Rather, it empowers only the Federal Trade Commission to pursue such claims. Because the homeowners had no right to file suit under the FTCA, this claim was also dismissed.

A review of this case shows that if the homeowner had simply obtained an attorney sooner to file these claims before the statute of limitations, and had filed under the Massachusetts Consumer Protection Act rather than the FTCA, it would have been much more likely that the case would not have been dismissed.

The case is Flores v. OneWest Bank

Culik Law handles lawsuits against banks related to foreclosure, mortgages, and loan modifications. If you have an issue with your bank or mortgage servicer, contact us to see if we can help.

#loanmodification #mortgage #foreclosure #MassachusettsConsumerProtectionAct #homeowner