30 Dec Louisiana and Massachusetts Legislative Update
The Louisiana legislature recently amended its laws related to the recordation of mortgages for savings and loan associations, effective January 1, 2016. Massachusetts amended its laws addressing the affidavit of sale under a power of sale in a mortgage to include certain definitions, effective December 31, 2015.
LOUISIANA HOUSE BILL 496
A mortgage granted in favor of a savings and loan association and a vendor’s privilege created in favor of a savings and loan association are now subject to the same standard inscription periods currently followed by all other mortgages in Louisiana. Previously, the law provided that any mortgage granted in favor of a savings and loan association and recorded as required remained in full force and effect without the necessity of being reinscribed in the mortgage records for a period of 41 years from the date of inscription.
This revision applies to all mortgages and vendor’s privileges currently in effect and new mortgages and vendor’s privileges created after January 1, 2016.
If the effect of this revision would cause the mortgage or vendor’s privilege to cease before January 1, 2019, then the effect of recordation will continue until January 1, 2019, or until the date on which filing of a notice of reinscription would have been required before this revision becomes effective, whichever occurs first. On that date, the effect of recordation will cease unless a notice of reinscription has been filed.
MASSACHUSETTS SENATE BILL 2015
“Arm’s length third party purchaser for value” is one who pays valuable consideration, including a purchaser’s heirs, successors and assigns but not including the foreclosing party or mortgage note holder or a parent, subsidiary, affiliate or agent of the foreclosing party or mortgage note holder or an investor or guarantor of the underlying mortgage note including, but not limited to Fannie Mae, Freddie Mac and FHA.
“Deadline” is three years from the date of the recording of the affidavit. The affidavit of sale under power of sale in mortgage shall after three years from the date of its recording be conclusive evidence in favor of an arm’s length third party purchaser for value at or subsequent to the foreclosure sale and that the power of sale under the foreclosure was duly executed and complied with Massachusetts law.
However, this will not be true if a legal action to challenge the validity of the foreclosure sale has commenced or the challenge has been asserted as defense or a counterclaim in a legal action, or if there is a challenge to the validity of the foreclosure sale asserted as a defense or counterclaim in a legal action by any party entitled to notice of sale who continues to occupy the mortgaged property as the party’s principal place of business. After the entry of the final judgment in such challenges and the final resolution of any appeal of that judgment, then the affidavit will become conclusive evidence of the sale. The sale is valid if the final judgment concludes that the power of sale was duly exercised. If the final judgment concludes that the power of sale was not duly exercised, then the foreclosure sale and the affidavit are void.
Absent a challenge as set forth above, title to the real property acquired by the arm’s length purchaser will not be set aside.
A material misrepresentation contained in an affidavit constitutes a violation of the unfair methods of competition or deceptive acts or practices statute.
The Attorney General, in collaboration with the Commissioner of Banks, will work with stakeholders participating in the foreclosure industry and stakeholders participating in foreclosure prevention, reduction or education programs to provide notification of the effects of these changes in the law to homeowners facing foreclosure and homeowners who were foreclosed upon.