Glenn Russell Stands up to lenders
Steve Dibert, MFI-Miami
On November 29, 2011, the Massachusetts Supreme Judical Court agreed to hear an appeal sua sponte by Attorney Glenn Russell in the case of HSBC Bank v. Jodi Matt. This case will determine whether a lender holding a securitized mortgage has standing to even begin a foreclosure action in Land Court under Massachusett’s version of Servicemembers Civil Relief Act which is one of the first steps servicers must take to begin foreclosing on a Massachusetts homeowner.
Under the act, mortgage servicers are required to file a complaint in the Land Court to ensure the borrower is not in active military service. Once the Land Court determines the borrower’s status in the military, the servicer can proceed to advertise and hold a public foreclosure auction. Up until the beginning of the foreclosure crisis, a Servicemembers action was considered nothing more than a mindless ritual. Glenn Russell began to challenge lenders’ right to start foreclosures in these initial Land Court proceedings two years ago.
HSBC v. Jodi Matt also involves Land Court Judge Keith Long (the judge in both the landmark U.S. Bank v. Ibanez and Bevilacqua cases). However, this time around Judge Long ruled against the homeowner by saying HSBC did have standing to proceed under the Servicemembers Civil Relief Act despite evidence that showed HSBC lacked legal standing to proceed with the foreclosure.
According to Glenn Russell, the original mortgage was held by New Century, which was in bankruptcy when it allegedly assigned the mortgage to HSBC. Russell argues there was no evidence the assignment was authorized by the bankruptcy trustee and questions either the signatory had authority to transfer New Century’s bankrupt assets to HSBC. Despite this, Judge Long ruled that HSBC, through a securitized pooling and servicing agreement, held a contractual right to become the holder of the mortgage, thereby conferring standing to start the foreclosure process.