Exploring the Injustices of Nonjudicial Foreclosures in Massachusetts

Introduction

The Fifth and Fourteenth Amendments to the U.S. Constitution prohibit the federal and state governments from depriving individuals of “life, liberty, or property, without due process of law.”¹ Yet these constitutional safeguards provide little protection in the context of institutional lending and nonjudicial foreclosures where ordinary citizens are left to the mercy of their creditors.² When a borrower is in default, their lending institution has sole discretion and power over their property.³

Consider a new homeowner who is integrated within their community as a chair of the regional school board, a former clergyman, and an activist for diversity inclusion.⁴ They purchase a home with their family and, as many people do, obtain a loan from a credit union to help finance their dream.⁵ Unfortunately, because of unforeseen hardships—a failing business, a contentious divorce, and bankruptcy—the homeowner becomes delinquent on their mortgage obligations.⁶ Eventually, the lending institution forecloses on the property.⁷ Despite the mortgage agreement requiring the lender to provide notice to the homeowner of their right to challenge a foreclosure prior to sale, the lender fails to do so.⁸ Nonetheless, the homeowner is evicted from their own home, levied additional payments, and expected to represent themselves in an extensive post-foreclosure court action.⁹

This is the story of Anthony Branch who, similar to thousands of others in recent years,¹⁰ lost his home to creditors and found no avail from the law despite clear statutory violations by his lender.¹¹ These scenarios ultimately raise recurring questions which often go unaddressed by courts, such as: what rights a defaulting borrower should be afforded; whether a lending institution’s noncompliance with a seemingly minor detail matters in the grand scheme of a borrower’s default; and whether we as a society find it acceptable that ordinary homeowners are expected to strictly comply with necessary provisions while large lending institutions are not.¹²

The 2024 decision by the Supreme Judicial Court of Massachusetts ( “SJC”) in Fannie Mae v. Branch revisited the challenges facing defaulting mortgagors attempting to retain possession of their homes.¹³ While the decision itself may seem like a routine application of the law consistent with precedent cases in Massachusetts, a deeper analysis reveals that the protective measures enacted by the state to ensure fair foreclosures are inadequate.¹⁴

This Comment will argue that the SJC’s decision in Branch demonstrates how lenders are able to exploit power of sale clauses despite mortgage provisions requiring them to strictly comply and ensure valid foreclosures absent judicial oversight. Part I provides a brief overview on mortgages and nonjudicial foreclosing practices in Massachusetts, as well as the pertinent law within the state. Part II discusses the SJC’s opinion in Branch, including the facts, procedural history, analysis, and holding of the Court. Part III argues that, while the Court applied the law correctly according to precedent, it failed to acknowledge the inherent injustices imposed on defaulting borrowers like Branch and ultimately issued an inequitable ruling. Part IV examines the adverse impacts on individual borrowers and societal perceptions derived from the SJC’s dismissive attitude towards defaulting mortgagors.

I. Background

Mortgages

A mortgage loan is a security interest in which the borrower (or “mortgagor”) agrees to borrow funds from a lender (or “mortgagee”) in exchange for the right of title to a piece of real property as collateral for the loan.¹⁵ When the parties enter into such an agreement, they often execute both a promissory note and a mortgage.¹⁶ The note is a contract containing the terms of the mortgage and details about the loan, and the mortgage is a security for the lender which grants them an interest in the subject property.¹⁷

Massachusetts is a “title theory” state which means that, upon the execution of a mortgage, the mortgagee is granted legal title to the property, and that interest is only conferred to the mortgagor when the debt is repaid in full.¹⁸ Thus, upon the violation of a conditioned circumstance (such as a borrower’s nonpayment), the mortgagee may foreclose on the mortgage and demand the entirety of the debt immediately.¹⁹ If the mortgagor fails to cure their default, the mortgagee has the right to seize the subject property and sell it to settle the debt.²⁰

Nonjudicial Foreclosures in Massachusetts

As a nonjudicial foreclosure state, Massachusetts does not require mortgagees to obtain judicial authorization prior to initiating a foreclosure.²¹ Massachusetts instead governs foreclosure through both state statutes and the terms included within the mortgage.²²

One standard mortgage clause is the “statutory power of sale,” an expedited method of private foreclosure allowing the mortgagee to sell the property via public auction if the mortgagor defaults on their payments.²³ In contrast to judicial foreclosure,²⁴ the power of sale merely requires the mortgagee to comply “with the terms of the mortgage and with the statutes relating to the foreclosure of mortgages by the exercise of a power of sale.”²⁵ Examples of such requirements include: providing notice of the impending sale in a local newspaper; sending notice of the sale to the homeowner’s address, including a chain of assignments evidencing the mortgagee’s authority to foreclose;²⁶ providing notice of the mortgagor’s right of opportunity to cure any default; and including additional rights from the mortgage related to refinancing the loan.²⁷

However, the absence of judicial overview forces the mortgagor to bear the burden of both identifying a mortgagee’s noncompliance with these terms and subsequently determining the appropriate request for equitable relief through the courts.²⁸ In fact, even if a mortgagor believes a mortgagee failed to comply with the necessary terms, the foreclosure will proceed unless the mortgagor obtains a court order to halt the proceedings.²⁹

Massachusetts Case Law

As a result of the mortgagee’s ability to accelerate foreclosures through their power of sale, the SJC has heard several challenges concerning the validity of these sales as borrowers attempt to retain possession of their homes.³⁰ Common issues in these cases are mortgagees providing faulty notices, lacking authority to foreclose at the time of sale, committing fraud or misrepresentations, and conducting other unfair practices like proceeding in bad faith.³¹

Nonetheless, the SJC has acknowledged that the mortgagee retains “substantial power” through their power of sale and has continuously adhered to the traditional rule that “one who sells under a power [of sale] must follow strictly its terms. If he fails to do so there is no valid execution of the power, and the sale is wholly void.”³² Although the SJC has previously been selective in its application of the rule,³³ the Court’s decision in U.S. Bank National Ass’n v. Ibanez demonstrated a brief return to the forceful requirement of strict compliance with regard to proper documentation of mortgage assignments.³⁴

The Court subsequently grappled with the issue of whether pre-foreclosure notices also require strict compliance and, if so, whether substantial or noncompliance should render the foreclosure void.³⁵ The SJC historically limited strict compliance to two circumstances: (1) the terms included within the language of the power of sale clause contained within the mortgage; and (2) any actions performed by the mortgagee in association with the foreclosure sale either before or after the sale.³⁶ Yet in Pinti v. Emigrant Mortgage Co., Inc., the Court extended the strict compliance standard to “provisions requiring and prescribing the pre-foreclosure notice of default” as well.³⁷ Crucially, the SJC only applied this rule to cases where the subject notices were sent after the Court’s decision on July 17, 2015.³⁸ Subsequently, in Federal National Mortgage Ass’n v. Marroquin, the SJC extended the Pinti rule to cases where the issue was raised during trial or upon appeal before the same date.³⁹ Thus, notices sent by a lender foreclosing on a defaulting borrower prior to July 17, 2015 were not required to strictly comply with agreed-upon mortgage provisions—so long as the notice did not render the foreclosure so unfair as to require the sale to be voided.⁴⁰

II. The Court’s Opinion

Factual History

In 2009, Anthony Branch secured a note in the amount of $103,050 and was granted a mortgage from Pentagon Credit Union ( “Pentagon”) to purchase property in Brockton, Massachusetts.⁴¹ Paragraph 22 of the mortgage required Pentagon to notify Branch of his “right to bring a court action to assert the non-existence of a default or any other defense . . . to acceleration and sale.”⁴²

Branch defaulted on his obligations in 2012, and Pentagon mailed him a Notice of Default and Right to Cure on February 28, 2013.⁴³ Pentagon mailed Branch two other Right to Cure Default letters on June 12, 2013, and June 30, 2014.⁴⁴ The June 30th notice (entitled “150 Day Right to Cure Mortgage Default”)⁴⁵ included the following language which, notably, omits the agreed upon mortgage provision to notify Branch of his right to challenge the foreclosure:

We are contacting you because you did not make your monthly loan payment due on August 1, 2012, September 1, 2012, October 1, 2012, November 1, 2012, December 1, 2012, January 1, 2013, February 3, 2013, March 1, 2013, April 1, 2013, May 1, 2013, June 1, 2013, July 1, 2013, August 1, 2013, September 1, 2013, October 1, 2013, November 1, 2013, December 1, 2013, January 1, 2014, February 1, 2014, March 1, 2014, April 1, 2014, May 1, 2014, and June 1, 2014, to Pentagon Federal Credit Union. You must pay the past due amount of $25,201.09 on it before November 27, 2014, which is 150 days from the date of this notice. The past due amount on the date of the notice is specified below.⁴⁶

Branch and Pentagon were unable to negotiate a loan modification, and Pentagon provided Branch notice of an impending foreclosure sale.⁴⁷ The foreclosure proceedings were stayed in January 2016 when Branch filed for bankruptcy, but he withdrew his petition in favor of an agreement with Pentagon to sell the property.⁴⁸ However, Branch’s ability to sell was delayed because of his pending divorce, and he was ultimately unable to comply with the agreement after Pentagon rejected an interested buyer’s offer.⁴⁹

In August 2016, Pentagon again provided Branch notice of the impending foreclosure sale through mail and publication in a local newspaper.⁵⁰ On September 14, 2016, Pentagon purchased the property as the highest bidder and then assigned the property to the Federal National Mortgage Association (“Fannie Mae”).⁵¹

Procedural History

The complicated court proceedings in this case began in June 2017, when Fannie Mae filed for summary process to both take possession of the property and collect use and occupancy payments from Branch.⁵² In response, Branch argued in part that the foreclosure should be void because of Pentagon’s noncompliance with the mortgage terms, having failed to notify Branch of his right to challenge the foreclosure prior to sale.⁵³

In 2018, the Housing Court granted Fannie Mae’s motion for summary judgment.⁵⁴ Fannie Mae was awarded possession and Branch was ordered to make monthly payments for use and occupancy.⁵⁵ Branch appealed the Court’s order and, while the appeal was pending, Fannie Mae sold the property to Roberto Cardoso.⁵⁶ Cardoso then filed an action against Branch to initiate summary process and intervened as a party as of right, joining Fannie Mae in the existing case pending in the Court of Appeals.⁵⁷

In September 2020, the Court of Appeals ruled that the issue concerning use and occupancy payments was moot since Fannie Mae no longer had a possessory interest in the property.⁵⁸ The Court of Appeals remanded the case back to the Housing Court to determine whether Cardoso should be permitted to intervene, which the Housing Court allowed.⁵⁹ Branch appealed and in April 2023, the Court of Appeals vacated Fannie Mae’s possession in the property due to mootness, rendered moot the appeal from Cardoso’s motion to intervene, and upheld the dismissal of Branch’s counterclaims.⁶⁰ Cardoso then appealed to the SJC for reconsideration.⁶¹

Holding

The SJC considered the following issues on appeal: (1) whether the appeal was moot; (2) whether to allow Cardoso to intervene as a party as of right and be joined with Fannie Mae as a plaintiff on the claim for possession; (3) whether the Housing Court correctly ruled in favor of Fannie Mae’s motion for summary judgment on its claim for possession—specifically, whether the foreclosure was invalid because of Pentagon’s noncompliance with pre-foreclosure notices and whether Pentagon lacked the authority to foreclose; and (4) whether Branch’s counterclaims were properly dismissed following Fannie Mae’s motion for summary judgment.⁶²

The SJC first ruled that Cardoso and Fannie Mae had legal standing and permitted Cardoso to intervene as a matter of right.⁶³ Considering the third issue, the SJC held the notices provided by Pentagon prior to foreclosure were not subject to Pinti’s strict compliance requirement because they were sent in 2013 and 2014, thus predating the decision.⁶⁴ Had the notices been sent after July 17, 2015, Pinti would have applied and Branch’s mortgage would have required strict compliance.⁶⁵ Similarly, the SJC also held that Pinti’s rule did not apply because legal proceedings in Branch’s case did not begin until 2017, meaning Branch failed to timely assert the issue at trial or on appeal prior to the Pinti decision.⁶⁶ In addition, the SJC also held there was insufficient evidence to determine whether Pentagon’s noncompliance was fundamentally unfair because Branch failed to properly raise the argument in the Housing Court.⁶⁷

After Branch’s strict compliance argument fell short, Branch’s only remaining argument was to allege a violation of the governing statute.⁶⁸ However, the Court determined Branch needed to file a proper counterclaim in the Housing Court which asserted that the violation “rendered the foreclosure so fundamentally unfair that [he or she] is entitled to affirmative equitable relief.”⁶⁹ Since Branch only presented claims in the Housing Court challenging Pentagon’s noncompliance of the mortgage terms, the SJC held that Branch not only failed to make a proper claim, but also failed to show any harm resulting from noncompliance.⁷⁰ The SJC thus concluded that the evidence failed to demonstrate sufficient harm or unfairness resulting from the notices that justified voiding the foreclosure.⁷¹ Lastly, the SJC dismissed Branch’s counterclaims because his arguments amounted to mere allegations and failed to demonstrate any genuine issues of material fact.⁷²

ANALYSIS

III. The SJC’s Decision Was Technically Correct but Ultimately Inequitable

The SJC’s Decision Was a Reasonable Application of the Law

First, the SJC did not upset any precedent rulings when they decided not to apply the strict compliance requirement from Pinti and determined Branch failed to raise a proper counterclaim in the Housing Court.⁷³ Pentagon’s notices were sent before Pinti’s cutoff date of July 17, 2015, and Branch first raised the issue of Pentagon’s noncompliance with paragraph 22 of his mortgage after this same date.⁷⁴ Therefore, it was within the SJC’s discretion to conclude Pentagon was not obligated to adhere to strict compliance with paragraph 22 of the mortgage under Pinti’s rule.⁷⁵

Additionally, Branch challenged the foreclosure sale and filed a number of counterclaims in the Housing Court.⁷⁶ However, Branch’s claims asserted violations in statutes governing foreclosures generally rather than power of sale provisions.⁷⁷ To void the foreclosure sale “for reasons other than failure to comply strictly with power of sale provided in the mortgage,” Branch was required to “prove that the violation . . . rendered the foreclosure so fundamentally unfair that [he] is entitled to affirmative equitable relief.”⁷⁸ The SJC correctly noted that Branch did not offer any evidence suggesting specific harms stemming from the infirmities in Pentagon’s notices—thus, the Court pragmatically dismissed this argument.⁷⁹

The SJC’s Ruling Was Inequitable

The SJC has general equity jurisdiction over “all cases and matters of equity cognizable under the general principles of equity jurisprudence.”⁸⁰ In essence, this means that the SJC may render a verdict based on fairness rather than relying on the technicalities imposed by presiding case law or rules.⁸¹ While the SJC’s decision was technically consistent with precedent, it nonetheless failed to recognize that Pentagon’s noncompliance with the statutory power of sale was in itself fundamentally unfair, and that the timing of Branch’s case warranted greater consideration of whether the Pinti rule should apply.⁸² Therefore, the SJC should have utilized their equitable authority to find Pentagon’s conduct fundamentally unfair, and thus void the sale.⁸³

1. Pentagon’s Noncompliance with M.G.L.A. ch. 183 § 21 – Statutory Power of Sale Should Have Voided the Foreclosure

First, the SJC should have voided the foreclosure sale because Massachusetts requires strict compliance with state statutes governing power of sale because of the substantial control it affords lenders.⁸⁴ M.G.L.A. ch. 183 § 21 pertains to statutory power of sales in mortgages and permits the power to be included in any mortgage by reference.⁸⁵ The statute provides that in order for the mortgagee to commence foreclosure proceedings pursuant to the power, they must “first comply[] with the terms of the mortgage and with the statutes relating to the foreclosure of mortgages by the exercise of a power of sale.”⁸⁶ Thus, the Court should have required strict compliance with paragraph 22 as it was a term of Branch’s mortgage.⁸⁷

The Notice of Default and Right to Cure notices sent by Pentagon merely informed Branch of his overdue payments and the date by which payments were due to avoid acceleration of the mortgage.⁸⁸ The notices made no mention of Branch’s rights to defend his interests or to challenge the foreclosure process.⁸⁹

The United States District Court for the District of Massachusetts (“District Court”) ruled on a similar issue in Beck v. Bank of New York Mellon Corp.⁹⁰ There, the District Court held that § 21 is “consistent with the policy that, because of the ‘substantial power’ to foreclose without prior judicial oversight, mortgagees ought to be especially scrupulous in carrying out the foreclosure process.”⁹¹ Thus, the District Court surmised that a lender’s notice indicating the borrower’s right to assert a defense “in the foreclosure proceeding” was not even substantially compliant because it was both misleading and failed to inform the borrower of their right to file a court action prior to sale.⁹² In Branch’s case, Pentagon’s noncompliance was even more extreme as they completely omitted the required provision.⁹³ Thus, the failure to inform Branch of his rights should have supported a finding that Pentagon’s notices did not strictly comply with the mortgage and therefore rendered the foreclosure void.⁹⁴

The SJC did not consider this issue, however, because Branch failed to assert a statutory power of sale claim in the Housing Court.⁹⁵ Similar to the argument posited in Pinti, had Branch asserted such a claim, the SJC would likely have been more amenable to voiding the foreclosure.⁹⁶ Yet the Court still provided little justification for why Branch was not entitled to an equitable remedy consistent with prior holdings,⁹⁷ instead opting to dismiss the argument on a procedural technicality.⁹⁸

2. Pentagon’s Failure to Provide Notice of Branch’s Rights Was Inherently Unfair and Impeded the Ability to Defend His Interests

Even if the SJC was correct to dismiss Branch’s argument based on a technical misstep, the Court should have given greater attention to the fundamental injustice resulting from Pentagon’s noncompliance.⁹⁹ After deciding that Pinti’s rule did not apply, the Court dismissed Branch’s inadequate compliance argument because he failed to offer evidence that demonstrated any harm stemming from Pentagon’s noncompliance.¹⁰⁰ But the harm resulting from a failure to provide notice of the borrower’s rights—when specifically enumerated within the mortgage—is inherent and detrimental to the borrower’s ability to protect their interests.¹⁰¹

Borrowers are already at a disadvantage when protecting their interests because they do not have the significant resources and experience that institutional lenders possess in conducting foreclosures.¹⁰² This is especially true when considering that defaulting mortgagors are often indigent and therefore lack the ability to retain counsel to help navigate procedural intricacies, complex litigation, and discerning borrowers’ rights.¹⁰³ In fact, not only are over 92% of defendants facing summary process actions in Massachusetts housing courts self-represented,¹⁰⁴ but a study on homeowner representation in foreclosures discovered that those without legal representation were almost twice as likely to be foreclosed on.¹⁰⁵ The expensive and lengthy nature of litigation,¹⁰⁶ compounded with mortgagors’ limited understanding of the legal system, results in many debtors failing to pursue legitimate claims or file correctly.¹⁰⁷

Rather than contemplate the dangers of noncompliance, the SJC was quick to dismiss the subject altogether and relied on the technical misstep by Branch—a pro se litigant.¹⁰⁸ The Court concluded that it “discern[s] no unfairness arising from the notices that would justify relief from foreclosure.”¹⁰⁹ Yet the unfairness is inherent, as the improper post-sale challenge by Branch likely stemmed from his inexperience and unfamiliarity with the law.¹¹⁰ Pentagon agreed in the mortgage to provide Branch the necessary notice to challenge the foreclosure prior to sale,¹¹¹ and was therefore required by the agreement and state statute to do so.¹¹²

Consequently, the Branch decision implies that lending institutions are afforded great leniency in their efforts during foreclosure while conversely requiring strict adherence to procedural technicalities from pro se litigants.¹¹³ Homeowners deserve for courts of equity to acknowledge the harms that stem from mortgagees’ noncompliance rather than contemptuously dismissing valid disputes and assigning the blame to self-representing defendants.¹¹⁴

3. Branch Deserved an Equitable Ruling Considering the Unique Timeframe of the Case

The SJC also failed to deliver an equitable ruling by imposing Pinti’s time restrictions despite Branch’s case falling within a unique timeframe not previously considered by the Court.¹¹⁵ The SJC held in Pinti that their decision to impose strict compliance requirements on the statutory power of sale would only apply to notices sent after the decision because they did not want past titles to be clouded.¹¹⁶ In its decision, however, the Court decided to apply the rule to Pinti’s case because, as the party seeking relief, Pinti was entitled to the benefit of the rule.¹¹⁷ Later, in Marroquin, the SJC held Pinti’s rule would apply to those cases which asserted the issue at trial or on appeal prior to Pinti’s decision.¹¹⁸ The SJC determined this because, while Marroquin’s foreclosure occurred prior to Pinti’s, the pace of litigation stalled Marroquin’s ability to raise the issue before Pinti’s decision.¹¹⁹

The SJC therefore considered the natural implications arising from Marroquin’s circumstances—specifically, the fact that Marroquin would have been afforded the same ruling as in Pinti had the case not been delayed by slow processing and litigation.¹²⁰ In other words, the SJC administered an equitable ruling and amended the rule in Marroquin’s favor to address the inherent unfairness stemming from their situation.¹²¹

The SJC offered no such consideration for Branch in his appeal despite his circumstances being ostensibly the same.¹²² Branch’s foreclosure process began in 2013 when Pentagon sent the first notice of default,¹²³ while Pinti and Marroquin were also notified of an impending foreclosure sale in 2012.¹²⁴ The notices sent by Pentagon predated the Pinti rule because Pinti’s litigation did not begin until 2013.¹²⁵ Furthermore, Branch’s case was postponed until 2017 when Fannie Mae filed actions against Branch after foreclosure.¹²⁶ Failed negotiations for loan modifications,¹²⁷ bankruptcy proceedings, agreements to sell the property, a contentious divorce, and Pentagon’s rejection of an interested buyer caused a delay in the case’s presentation.¹²⁸ Therefore, not only did Pentagon fail to notify Branch of his right to assert a defense to the foreclosure, but the delay in litigation also deprived Branch the opportunity to assert the issue at trial prior to Pinti’s decision in 2015.¹²⁹ All the while, Branch had a valid claim—like those accepted by the SJC in Pinti and Marroquin—to defend his interests and void the foreclosure.¹³⁰

Thus, Branch’s case was caught in a unique timeframe in which an earlier action asserting the issue, or greater delay in the notices being sent, would likely have resulted in a different outcome.¹³¹ Unfortunately for Branch, he attempted to cooperate with Pentagon and by the time his case was litigated and heard, the argument had already been submitted and accepted with time restrictions in place.¹³² The SJC precluded Branch from an equitable ruling like those it issued in Pinti and Marroquin, and provided no justification for this result other than that Branch’s case did not adhere to the time restrictions imposed by Pinti.¹³³

IV. The SJC’s Dismissive Attitude Toward Homeowners Poses Significant Adverse Impacts on Borrowers and Undermines Society’s Confidence in the Judicial Process

The SJC’s decision in Branch is indicative of a prevalent theme among courts: foreclosed homeowners do not deserve the same deference as lending institutions.¹³⁴ The SJC’s dismissive attitude towards mortgagors is not expressly articulated within the opinion, but is rather discernable from its failure to justify—or even expound upon—its decision to withhold an equitable ruling for Branch.¹³⁵ Rather, the SJC’s opinion relied predominantly on brief explanations that identified technical errors within Branch’s claims without addressing the consequences of Pentagon’s noncompliance.¹³⁶ Therefore, even if this case does not have a drastic effect on Massachusetts’s foreclosure laws, it likely impacts both society’s perceptions of the courts and reinforce the belief among lending institutions that defects in foreclosure proceedings are unimportant.¹³⁷

The SJC’s Decision Promotes Perceptions of Inequality Between Mortgagors and Lending Institutions

The SJC exacerbated the inequality between lending institutions and borrowers when it failed to address the harms caused by a lender’s noncompliance with the mortgage terms.¹³⁸ Mortgagors are already at a disadvantage when entering into a mortgage agreement with lenders because of their weakened bargaining power.¹³⁹ Mortgagees are therefore able to define the terms of the mortgage and impose stringent requirements upon the borrower so they may obtain necessary loans.¹⁴⁰ As a result, the mortgagor is subject to these terms and expected to strictly adhere to the provisions not only to secure financing, but to remain in their homes as well.¹⁴¹

Courts therefore skew an already imbalanced power dynamic when they discount the legal obligations of lending institutions and force ordinary homeowners to strictly comply with both their responsibilities under the mortgage, and procedural technicalities in the expedited and complicated court proceedings of nonjudicial foreclosures.¹⁴² Instead, courts should utilize their equitable authority to address this imbalance between lenders and borrowers—especially when presented with cases similar to Branch where pro se litigants are at the complete mercy of their lenders.¹⁴³ Ultimately, the underlying societal perception is that those at risk of losing the most are also unilaterally burdened with complying the most.¹⁴⁴

Failure to Address Adverse Health Outcomes Associated with Foreclosure Promotes Perception of Court’s Favor for Lenders

In addition, homeowners who have experienced foreclosure also require scrupulous protection from courts because of the negative health outcomes associated with foreclosures.¹⁴⁵ These homeowners are increasingly susceptible to adverse health outcomes due to the immense stress of losing their homes, the prolonged nature of these proceedings, and the resulting social isolation.¹⁴⁶ In fact, negative mental health conditions associated with undergoing foreclosure “include[] depression, anxiety, alcohol use, psychological distress, and suicide,”¹⁴⁷ and may contribute to physical ailments like cardiovascular disease, high blood pressure, and diabetes.¹⁴⁸ In addition, individuals experiencing foreclosure also incur substantial costs to their families as resulting financial instabilities can often lead to marital strain and divorce.¹⁴⁹

Courts should consider these outcomes for two reasons: (1) not only do homeowners lack the resources and technical experience to protect their interests, but adverse health effects and a lack of communal support may also contribute to errors during litigation;¹⁵⁰ and (2) courts should consider the humanitarian aspect of foreclosures when contemplating an equitable ruling against lenders who failed to comply with their own obligations to the borrower.¹⁵¹ Consequently, courts brush aside these important considerations when they fail to hold lending institutions accountable at the expense of individuals losing their homes.¹⁵² The indifferent dismissal of a distressed borrower’s legitimate claim for relief, based on a lender’s noncompliance, endorses the perception that the borrower is unworthy of consideration and therefore unequal to that of the lender.¹⁵³

Courts Should Require Strict Compliance to Help Identify Wrongful Foreclosures and Predatory Behaviors

Court decisions relinquishing lenders from their obligations under the mortgage also have drastic impacts on those rightful owners being wrongly foreclosed on.¹⁵⁴ Courts should ensure that lenders are complying with every necessary provision because, especially in nonjudicial foreclosures, it may be the difference between a genuine homeowner being evicted or not.¹⁵⁵ In essence, courts must thoroughly examine whether the homeowner is actually in default and that the lender did not engage in any predatory habits.¹⁵⁶ Whether intentional or by mistake, abuse is prevalent in nonjudicial foreclosure sales¹⁵⁷ as lenders are capable of procuring homes despite apparent deficiencies and fraudulent behaviors.¹⁵⁸ The onus should therefore be on the courts to identify when lenders exhibit such behaviors and promote equality before the law, rather than relying on homeowners to raise disputes on the defects.¹⁵⁹ The failure to do so not only indicates to society that courts fail to consider the interests of homeowners as equal to the large lending institutions,¹⁶⁰ but that the court itself may be fraudulent by rewarding such careless deficiencies.¹⁶¹ Consequently, the courts lose credibility, which fuels greater resentment and distrust in the judicial system as a whole.¹⁶²

CONCLUSION

In Fannie Mae v. Branch, the SJC decided that the careless omission of a necessary mortgage provision by a lending institution did not outweigh the procedural errors of a self-representing homeowner in default. While borrowers are obligated to adhere to their mortgage agreements and are expected to pay their loans, it is contrary to public policy and societal expectations for courts to instinctively favor noncomplying lending institutions over the rights of ordinary homeowners. Although the SJC ultimately rendered a verdict consistent with the laws and precedent of Massachusetts, the brevity of the opinion sent a clear message—borrowers and creditors do not deserve equal attention or deference before a court of law.

It is easy to forget that at the heart of every foreclosure is an individual, or family, at risk of losing something sacred to their way of living. This is especially true when considering that nonjudicial foreclosures do not require a court to authorize the eviction of a family from their home. In many instances, maybe the borrower is at fault, and maybe the just ruling is to allow foreclosure. But when institutions wield their power and influence over borrowers to acquire homes through deceitful behaviors, courts should pay close attention and address the legitimate concerns raised by the everyday people fighting to protect their homes.

After all, these are people’s homes we are talking about.

1
U.S. Const. amend. V; U.S. Const. amend. XIV, § 1. ↩︎
2
See John Pollock, Going Public: The State-Action Requirement of Due Process in Foreclosure Litigation, 43 Clearinghouse Rev. J. of Poverty L. & Pol’y 458, 459 (2010) (emphasizing violations of Fifth and Fourteenth Amendments require a basis on state action). ↩︎
3
See id. ↩︎
4
Tony Branch, LinkedIn, https://perma.cc/N4FS-QNE2 (last visited Feb. 4, 2026). ↩︎
5
Fed. Nat’l Mortg. Ass’n v. Branch, No. 17-SP-02483, 2018 WL 11678017, at *2 (Mass. Housing Ct. Mar. 19, 2018). ↩︎
6
See Corrected Br. for the Appellant at 42, Fannie Mae v. Branch, 236 N.E.3d 1181 (Mass. 2024) (No. SJC-13510) [hereinafter Branch’s Brief]. ↩︎
7
Fannie Mae v. Branch, 236 N.E.3d 1181, 1185 (Mass. 2024). ↩︎
8
Id. at 1190–91. ↩︎
9
Id. at 1185–86. ↩︎
10
Foreclosure Trends Reports, 2024 Interactive Foreclosure Trends Dashboard, Commonwealth of Mass., https://perma.cc/QJW9-3JQC (last visited July 29, 2026) (compiling total number of foreclosure sales between 2019 and 2023 equaling 5,154 sales). ↩︎
11
See Branch, 236 N.E.3d at 1190–93. ↩︎
12
See David A. Dana & Ernesto Longa, Why Mortgage “Formalities” Matter, 24 Loy. Consumer L. Rev. 505, 506–10 (2012). ↩︎
13
236 N.E.3d at 1184–85. ↩︎
14
See id. at 1187–93. ↩︎
15
Mortgage, Cornell L. Sch., https://perma.cc/82QU-NMGZ (last updated June 2023) [hereinafter Cornell, Mortgage]. ↩︎
16
Amy Loftsgordon, What’s the Difference Between a Mortgage and a Promissory Note?, Nolo, https://perma.cc/B8A6-LF8T (last updated Aug. 9, 2024). ↩︎
17
Id. ↩︎
18
U.S. Bank Nat. Ass’n v. Ibanez, No. 384283, 2009 WL 3297551, at *5 n.27 (Mass. Land Ct. Oct. 14, 2009). ↩︎
19
Cornell, Mortgage, supra note 15. ↩︎
20
Cornell, Mortgage, supra note 15. ↩︎
21
U.S. Bank Nat. Ass’n v. Ibanez, 941 N.E.2d 40, 49 (Mass. 2011); see Mass. Gen. Laws Ann. ch. 183, § 21 (West 2025). ↩︎
22
Mass. Gen. Laws Ann. ch. 183, § 21; Ibanez, 941 N.E.2d at 49. ↩︎
23
Mass. Gen. Laws Ann. ch. 183, § 21. ↩︎
24
Dana & Longa, supra note 12, at 511 (requiring lenders to bring a court action and obtain judicial authorization prior to foreclosure proceedings). ↩︎
25
Mass. Gen. Laws Ann. ch. 183, § 21. ↩︎
26
Mass. Gen. Laws Ann. ch. 244, § 14 (West 2012). ↩︎
27
Id. § 35A. ↩︎
28
See U.S. Bank Nat. Ass’n v. Ibanez, 941 N.E.2d 40, 49 (Mass. 2011). ↩︎
29
Id. ↩︎
30
See Molly F. Jacobson-Greany, Setting Aside Nonjudicial Foreclosure Sales: Extending the Rule to Cover Both Intrinsic and Extrinsic Fraud or Unfairness, 23 Emory Bankr. Dev. J. 139, 150–51 (2006). ↩︎
31
Id. at 151–54 (providing common examples for setting aside foreclosure sales among nonjudicial foreclosure states). ↩︎
32
Ibanez, 941 N.E.2d at 49–50 (quoting Moore v. Dick, 72 N.E. 967, 968 (Mass. 1905)). ↩︎
33
See, e.g., Thompson v. JPMorgan Chase Bank, N.A., 158 N.E.3d 35, 40–42 (Mass. 2020) (finding conflicting terms in mortgagee’s notice compared to terms of the mortgage was not deceptive and foreclosure was not void); Turra v. Deutsche Bank Trust Company Americas, 68 N.E.3d 631, 633–34 (Mass. 2017) (finding a lender’s failure to strictly comply with post-foreclosure notices did not render the foreclosure void). ↩︎
34
See 941 N.E.2d at 53 (declining to find U.S. Bank had clear title prior to foreclosure because of assignment errors, despite U.S. Bank initiating proceedings—without mortgagor’s challenge—for an unrelated issue concerning publication of notice). ↩︎
35
Pinti v. Emigrant Mortg. Co., Inc., 33 N.E.3d 1213, 1223 (Mass. 2015) (deciding whether a lender was required to strictly adhere to an agreed upon notice provision in the mortgage or whether a lesser degree of compliance (substantial compliance) was valid). ↩︎
36
Id. at 1220–21. ↩︎
37
Id. at 1221. ↩︎
38
See generally id. at 1220–21 (emphasizing that the holding will be used for future cases). ↩︎
39
74 N.E.3d 592, 593 (Mass. 2017) (commenting that, had Marroquin’s case not been delayed by court proceedings, the same ruling from Pinti would have applied). ↩︎
40
Fannie Mae v. Branch, 236 N.E.3d 1181, 1190–91 (Mass. 2024). ↩︎
41
Fed. Nat’l Mortg. Ass’n v. Branch, No. 17-SP-02483, 2018 WL 11678017, at *2 (Mass. Hous. Ct. Mar. 19, 2018). ↩︎
42
Branch, 236 N.E.3d at 1190. ↩︎
43
Id. at 1185. ↩︎
44
Id. ↩︎
45
Branch, 2018 WL 11678017 at *5. ↩︎
46
Branch’s Brief, supra note 6, at 25. ↩︎
47
Branch, 236 N.E.3d at 1185. ↩︎
48
Branch, 2018 WL 11678017 at *3 n.5. ↩︎
49
Branch’s Brief, supra note 6, at 42. ↩︎
50
Br. of Plaintiff-Appellee Fed. Nat’l Mortg. Ass’n at 11, Fannie Mae v. Branch, 236 N.E.3d 1181 (Mass. 2024) (No. SJC-13510). ↩︎
51
Branch, 236 N.E.3d at 1185. ↩︎
52
Id. ↩︎
53
Id. at 1185 n.7 (referencing Massachusetts statutory provisions that were cited in the counterclaim). ↩︎
54
Id. at 1186. ↩︎
55
Id. ↩︎
56
Id. ↩︎
57
Branch, 236 N.E.3d at 1186. ↩︎
58
Id. ↩︎
59
Id. ↩︎
60
Id. ↩︎
61
Id. ↩︎
62
Id. at 1187–92. ↩︎
63
Branch, 236 N.E.3d at 1187–90. ↩︎
64
Id. at 1191. ↩︎
65
See id. ↩︎
66
Id. ↩︎
67
Id. at 1191–92. ↩︎
68
See Bank of Am., N.A. v. Rosa, 999 N.E.2d 1080, 1088 (Mass. 2013). ↩︎
69
U.S. Bank Nat’l Ass’n v. Schumacher, 5 N.E.3d 882, 891 (Mass. 2013) (Gants, J., concurring) (quoting Rosa, 999 N.E.2d at 1088). ↩︎
70
Branch, 236 N.E.3d at 1191–92. ↩︎
71
Id. ↩︎
72
Id. at 1192. ↩︎
73
See Fed. Nat’l Mortg. Ass’n v. Marroquin, 74 N.E.3d 592, 597 (Mass. 2017); Pinti v. Emigrant Mortg. Co., Inc., 33 N.E.3d 1213, 1227 (Mass. 2015); Rosa, 999 N.E.2d at 1088. ↩︎
74
Branch, 236 N.E.3d at 1185–86. ↩︎
75
Id. at 1191. ↩︎
76
Fed. Nat’l Mortg. Ass’n v. Branch, 2018 WL 11678017, at *1 (Mass. Housing Ct. 2018) (including promissory estoppel, negligent misrepresentation, and noncompliance with relevant statutes governing notice of assignments in foreclosures and unfair practices). ↩︎
77
Id. ↩︎
78
U.S. Bank Nat’l Ass’n v. Schumacher, 5 N.E.3d 882, 891 (Mass. 2013) (quoting Rosa, 999 N.E.2d at 1088). ↩︎
79
Branch, 236 N.E.3d at 1191–92. ↩︎
80
Mass. Gen. Laws Ann. ch. 214, § 1 (West 2024). ↩︎
81
Equitable, Cornell L. Sch., https://perma.cc/Q77Q-DQXD (last updated Nov. 2025). ↩︎
82
Branch, 236 N.E.3d at 1191–93. ↩︎
83
See Daniel Bahls & Katherine Hunt, Abhorring a Forfeiture: The Importance of Equitable Jurisdiction in a Foreclosure Crisis, 41 Stetson L. Rev. 779, 802 (2012) (“[E]quity should be invoked when there is no legal remedy at law and fairness requires it according to the circumstances of the case.”). ↩︎
84
U.S. Bank Nat. Ass’n v. Ibanez, 941 N.E.2d 40, 49–50 (Mass. 2011) (quoting Moore v. Dick, 72 N.E. 967, 968 (Mass. 1905)). ↩︎
85
Mass. Gen. Laws Ann. ch. 183, § 21 (West 2024). ↩︎
86
Id. ↩︎
87
Branch, 236 N.E.3d at 1190 (requiring Pentagon to provide notice of Branch’s rights to challenge the foreclosure in a separate court action). ↩︎
88
Branch’s Brief, supra note 6, at 25. ↩︎
89
See Branch’s Brief, supra note 6, at 25. ↩︎
90
91 F. Supp. 3d 154, 163 (Mass. Dist. Ct. 2015) (relating to whether lender’s notice complied with mortgage’s provision requiring notice of borrower’s right to assert defense to an accelerated foreclosure). ↩︎
91
Id. at 165. ↩︎
92
Id. at 164–65 (emphasis added). ↩︎
93
See Branch’s Brief, supra note 6, at 25. ↩︎
94
See Fed. Nat’l Mortg. Ass’n v. Marroquin, 74 N.E.3d 592, 598 (Mass. 2017) (holding that notice stating that the borrower “may have the right to bring a court action” was misleading and voided foreclosure); Pinti v. Emigrant Mortg. Co., Inc., 33 N.E.3d 1213, 1222 (Mass. 2015) (holding that notice including borrower’s “right to assert in any lawsuit for foreclosure and sale” misleading and voided foreclosure); Beck, 91 F. Supp. 3d 154 at 164–65 (holding that notice indicating borrower’s right to assert defense “in the foreclosure proceeding” is misleading and failed to substantially comply with mortgage provision). ↩︎
95
Branch, 236 N.E.3d at 1191–92. ↩︎
96
See 33 N.E.3d at 1217–18 (arguing that “compliance with the terms of the mortgage describing the steps that lead up to foreclosure, beginning with the notice of default provision spelled out in paragraph 22, is a necessary component of the power of sale provided in the mortgage as well as of the statutory power of sale set out in [M.G.L.A] c. 183, § 21”). ↩︎
97
See, e.g., James B. Nutter & Company v. Estate of Murphy, 88 N.E.3d 1133, 1142 (Mass. 2018) (“[Mortgagee] may not foreclose unless it strictly complies with the requirements in § 21, which in turn requires strict compliance with all other statutes related to the exercise of the power of sale.”); Marroquin, 74 N.E.3d at 597 (“If this case had proceeded to judgment more promptly in the Housing Court, this appeal, rather than Pinti, might have been the one that established the so-called Pinti rule.”); Pinti, 33 N.E.3d at 1222 (“It is hardly unfair or burdensome to require a mortgagee . . . to comply with the provisions of paragraph 22 in one of its own mortgages by sending a notice that conforms to the language of the paragraph.”). ↩︎
98
See Branch, 236 N.E.3d at 1191–92. ↩︎
99
See id. ↩︎
100
Id. ↩︎
101
See Pinti, 33 N.E.3d at 1225–26 (“[I]f the mortgagor has a valid defense to the foreclosure sale . . . but is not made aware that he or she must initiate an action in court against the mortgagee to raise that defense, the sale may well proceed and result in title passing to a bona fide purchaser without knowledge of the issue—at which point . . . the mortgagor’s right to redeem his or her home may well be lost.”). ↩︎
102
Jesse Soslow, Comment, Incentivizing Deeds-in-Lieu of Foreclosure: An Argument for the Expansion of the Home Affordable Foreclosure Alternative (“HAFA”) Program, 14 U. Pa. J. Bus. L. 583, 593 (2012). ↩︎
103
See id. ↩︎
104
Housing Court Department, Fiscal Year 2018 Statistics, Commonwealth of Mass., https://perma.cc/B6QT-ZKEA (last visited July 29, 2026). ↩︎
105
Emily S. Taylor Poppe, Homeowner Representation in the Foreclosure Crisis, 13 J. Empirical Legal Stud. 809, 821–22 (2016). ↩︎
106
Jacobson-Greany, supra note 30, at 167–68. ↩︎
107
Elizabeth Renuart, Toward a More Equitable Balance: Homeowner and Purchaser Tensions in Nonjudicial Foreclosure States, 24 Loy. Consumer L. Rev. 562, 569 (2012). ↩︎
108
Fannie Mae v. Branch, 236 N.E.3d 1181, 1191 (Mass. 2024) (reasoning that “a mortgagor in [Branch’s] position – raising such a defect as a defense in a postforeclosure summary process action – is required to show that the violation ‘rendered the foreclosure so fundamentally unfair that [he or] she is entitled to affirmative equitable relief’”). ↩︎
109
Id. at 1192. ↩︎
110
See Soslow, supra note 102, at 593. ↩︎
111
Branch, 236 N.E.3d at 1190. ↩︎
112
See Pinti v. Emigrant Mortg. Co., Inc., 33 N.E.3d 1213, 1217–18, 1224 (Mass. 2015) (holding “the provisions of paragraph 22 constitute ‘terms of the mortgage’ governing the power of sale, and that, in order to conduct a valid foreclosure, [mortgagee] was obligated to comply strictly with paragraph 22’s notice of default provisions”). ↩︎
113
See 236 N.E.3d at 1191–92. ↩︎
114
See Dana & Longa, supra note 12, at 517. ↩︎
115
Branch, 236 N.E.3d at 1191–92. ↩︎
116
Pinti, 33 N.E.3d at 1227. ↩︎
117
Id.; see Eaton v. Fed. Nat’l Mortg. Ass’n, 969 N.E.2d 1118, 1133 (Mass. 2012). ↩︎
118
Fed. Nat’l Mortg. Ass’n v. Marroquin, 74 N.E.3d 592, 597 (Mass. 2017). ↩︎
119
Id. ↩︎
120
Id. ↩︎
121
Id. ↩︎
122
Compare Fannie Mae v. Branch, 236 N.E.3d 1181, 1185–86 (Mass. 2024), with Marroquin, 74 N.E.3d at 594–95. ↩︎
123
Branch, 236 N.E.3d at 1185. ↩︎
124
Marroquin, 74 N.E.3d at 594; Pinti v. Emigrant Mortg. Co., Inc., 33 N.E.3d 1213, 1216 (Mass. 2015). ↩︎
125
33 N.E.3d at 1216. ↩︎
126
Branch, 236 N.E.3d at 1185. ↩︎
127
Id. ↩︎
128
Branch’s Brief, supra note 6, at 42. ↩︎
129
Branch, 236 N.E.3d at 1191. ↩︎
130
See Fed. Nat’l Mortg. Ass’n v. Marroquin, 74 N.E.3d 592, 598 (Mass. 2017); Pinti, 33 N.E.3d at 1222–23. ↩︎
131
See Branch, 236 N.E.3d at 1191–92. ↩︎
132
See Marroquin, 74 N.E.3d at 595–96; Pinti, 33 N.E.3d at 1227. ↩︎
133
Branch, 236 N.E.3d at 1191. ↩︎
134
See Dana & Longa, supra note 12, at 510 (highlighting limited number of judicial opinions addressing the consequences of lenders’ noncompliance with mortgages, likely because courts do not take foreclosed homeowners seriously). ↩︎
135
See Dana & Longa, supra note 12, at 510. ↩︎
136
See generally Branch, 236 N.E.3d at 1191–93 (providing only a couple of brief substantive sentences addressing each of Branch’s claims and how technical errors precluded relief). ↩︎
137
See Dana & Longa, supra note 12, at 507–08. ↩︎
138
Dana & Longa, supra note 12, at 507–08. ↩︎
139
Jacobson-Greany, supra note 30, at 169. ↩︎
140
Jacobson-Greany, supra note 30, at 169–70 (including requiring borrowers to sign promissory notes with favorable terms like rights to recover penalties for late payments, accelerate the debt, and power of sale). ↩︎
141
See Jacobson-Greany, supra note 30, at 169–70. ↩︎
142
See Dana & Longa, supra note 12, at 508; Renuart, supra note 107, at 579 (placing borrowers “on an extremely short leash” to either strictly comply with procedural requirements to challenge foreclosure or lose any right to challenge the sale). ↩︎
143
Bahls & Hunt, supra note 83, at 795. ↩︎
144
See Dana & Longa, supra note 12, at 507–08; Renuart, supra note 107, at 579. ↩︎
145
See Janet Currie & Erdal Tekin, Is There a Link Between Foreclosure and Health?, 7 Am. Econ. J: Econ. Pol’y 63, 65 (2015) (indicating “that a rise in foreclosures is associated with significant increases in hospital and emergency room visits for conditions including mental health problems, heart attack, and stroke”). ↩︎
146
Alexander C. Tsai, Home Foreclosure, Health, and Mental Health: A Systematic Review of Individual, Aggregate, and Contextual Associations, PLoS ONE, Apr. 2015, at 1, 2. ↩︎
147
Id. at 12. ↩︎
148
The Hidden Mental Health Toll of Foreclosure: What Housing Professionals Need to Know, BlueHub Cap. (May 22, 2024),https://perma.cc/87YW-ACQT . ↩︎
149
Bahls & Hunt, supra note 83, at 794. ↩︎
150
Cf. Jarrod F. Reich, Capitalizing on Healthy Lawyers: The Business Case for Law Firms to Promote and Prioritize Lawyer Well-Being, Harv. L. Sch. Ctr. on the Legal Pro. (Mar.-Apr. 2020), https://perma.cc/Z6UQ-NMQQ (finding lawyers suffering from adverse mental health conditions and lacking support are more prone to mistakes, less productive, and less efficient). ↩︎
151
See Erika Rickard, How to Make Civil Courts More Open, Effective, and Equitable, Pew, https://perma.cc/8CB2-T6MJ (last updated Dec. 13, 2023) (providing that “an equitable court identifies disparities in litigants’ experiences . . . and works to address them so that all court users can assert their rights, receive fair decisions, and have those decisions enforced”). ↩︎
152
See Bahls & Hunt, supra note 83, at 814 (“[T]he equitable maxim that ‘he who comes into equity must come with clean hands.’”) (quoting Precision Instrument Manufacturing Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 814–15 (1945)). ↩︎
153
See Dana & Longa, supra note 12, at 517. ↩︎
154
See Dana & Longa, supra note 12, at 507. ↩︎
155
See Dana & Longa, supra note 12, at 507. ↩︎
156
See Renuart, supra note 107, at 564. ↩︎
157
Jacobson-Greany, supra note 30, at 167. ↩︎
158
Renuart, supra note 107, at 564 (including “the failure to provide contractually or legally required notices; lack of authority to foreclose; fraud in the process; rigging the sale; grossly inadequate sale price; and other irregularity or unfairness”). ↩︎
159
See Dana & Longa, supra note 12, at 508. ↩︎
160
Dana & Longa, supra note 12, at 517. ↩︎
161
Renuart, supra note 107, at 573. ↩︎
162
Renuart, supra note 107, at 573-74. ↩︎

To Close or Not to Foreclose: An Examination of Massachusetts’s Inadequate Compliance Measures in Nonjudicial Foreclosures

Introduction

ANALYSIS

CONCLUSION

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