WHY U.S. BANK LOST ITS CASE AGAINST IBANEZ ON A FORECLOSED PROPERTY By David Zak, Lawyer

Introduction A Massachusetts lawyer noted among Hispanic homeowners,

David Zak possesses a strong background in mortgage lending laws. Having previously worked with the underwriting and loan origination departments for many financial institutions, David Zak is knowledgeable about real estate title transfers.

Massachusetts has seen an influx of rescinded mortgages due to improper recordation of assignments before carrying out a foreclosure sale. U.S. Bank National Association v. Ibanez is a good example. U.S. Bank filed a lawsuit at the Land Court “to quiet or establish the title to land situated in the commonwealth or to remove a cloud from the title thereto” under General Law c. 240. The goal was to clarify rightful ownership of the Ibanez property, which was acquired by the company through a foreclosure sale.

Case against Ibanez In an effort to defend its case, the financial institution

offered substantial documents outlining the progression of title ownership. However, the judge could not find evidence supporting the plaintiff’s claim of holding the title. Intent to assign the mortgage by Structured Asset Securities Corporation to U.S. Bank was provided in the form of a private placement memorandum, but this did not indicate proof that the title ever transferred. In fact, the final recorded document stated that Option One, a company that was assigned the title from Rose Mortgage, was the title holder during the sale. Thus, U.S. Bank lost its case.