Lenders and consumers alike have anxiously awaited the outcome of the Massachusetts Supreme Judicial Court's (the "SJC’s") review of the Massachusetts Land Court's 2009 landmark decision in U.S. Bank, Nat'l Ass'n. v. Ibanez, where two mortgage foreclosures were invalidated because the foreclosing lenders were not able to produce sufficient proof of mortgage ownership. Multiple mortgage assignments and securitization agreements are now common practice in the mortgage industry, and consumer advocates have come to find that dotting the "i's" and crossing the "t's" with respect to mortgage transfers may be the Achilles heel for some lenders. The Land Court's Ibanez decision was significant for its finding that only fully executed assignments in recordable form are sufficient to prove mortgage ownership, rejecting other forms of evidence, such as securitization and pooling agreements.

The SJC is one of the first state supreme courts to weigh in on the evidence necessary for foreclosing lenders to demonstrate that they validly hold mortgages they are attempting to foreclose. Last week the suspense ended. On January 7, 2011, the SJC issued its opinion in the Ibanez case that makes clear that the foreclosing lender must be able to document ownership of the mortgage to be foreclosed before issuing notices of foreclosure. Importantly, however, the SJC did not restrict evidence of mortgage ownership to fully executed assignments in "recordable form," as the Land Court had found. Rather, the SJC noted that a foreclosing lender may document its ownership in many ways, including securitization agreements.