Court sinks 28-year foreclosure over undisclosed bankruptcy asset
On December 31, 2001, Main Street’s sole shareholder – also the president, treasurer, clerk, and director – dissolved the corporation. After the statutory wind-down, the note and mortgage passed to him personally.
In October 2010, he filed for Chapter 7 bankruptcy. On the required asset schedules, signed under penalty of perjury, he disclosed “none” for business interests and “none” for equitable or future interests. He never listed the mortgage. His liabilities were discharged in February 2011.
A title insurer flagged the missing discharge during the bankruptcy. He never amended his schedules. In 2013, he contacted the insurer saying he had found the original note in Main Street’s “archives” and requested personal payment.
In 2016, Main Street’s agent registered a certificate of entry on the property – the first step in foreclosure by entry, a rarely used Massachusetts method where a mortgagee holds peaceable, unchallenged possession for three years to foreclose the right of redemption. The sole shareholder later revived the corporation, and in March 2020 Main Street petitioned the Land Court for a new title.
The homeowners, Caliber, and MERS opposed. The Land Court granted summary judgment. The Appeals Court affirmed.
