In Bank of America, N.A. v. Debora A. Casey (In re Pereira), 791 F. 3d 180 (1st Cir. 2015), the United States Court of Appeals for the First Circuit certified the following questions to the Massachusetts Supreme Judicial Court:
- May an affidavit executed and recorded pursuant to G.L. c 183, § 5B, attesting to the proper acknowledgment of a recorded mortgage containing a Certificate of Acknowledgment that omits the name of the mortgagor, correct what the parties say is a material defect in the Certificate of Acknowledgment of that mortgage?
- May an affidavit executed and recorded pursuant to G.L. c 183, § 5B, attesting to the proper acknowledgment of a recorded mortgage containing a Certificate of Acknowledgment that omits the name of the mortgagor, provide constructive notice of the existence of the mortgage to a bona fide purchaser, either independently or in combination with the mortgage?
In the underlying adversary proceeding, the bankruptcy court judge ruled in favor of the trustee, holding that an attorneys’ affidavit, executed pursuant to G.L. c. 183, § 5B, could not cure such a defect or provide constructive notice, thereby allowing the trustee to avoid the mortgage. Said ruling was overturned in Bank of America, N.A. v. Debora A. Casey (In re Pereira), 517 B.R. 1 (D. Mass. 2014), with the district court judge holding that the affidavit did provide satisfactory acknowledgment that the mortgage was executed by the borrowers voluntarily, thereby making the mortgage properly recorded and providing notice to the world of the mortgage.
On further appeal, the First Circuit certified the above questions to the Supreme Judicial Court. It is the trustee’s position that the attorney’s affidavit cannot cure such a defect because a defective mortgage cannot be legally recorded in the first place and, therefore, it cannot provide constructive notice in the registry of deeds of the encumbrance on the property. It is the bank’s position that an attorney’s affidavit can cure both substantive and technical defects in the mortgage, and, at the very least, the affidavit provides constructive notice of the mortgage good against a bona fide purchaser for value.
The Supreme Judicial Court heard oral argument on February 9, 2016, and a decision is pending.