Lenders must have paperwork to foreclose, SJC rules

Says future seizures require paperwork

The state’s highest court ruled Friday that lenders must have proper paperwork in hand at the time they complete a foreclosure, but the decision does not apply to seizures that have already taken place, removing a cloud of uncertainty over the status of property titles for thousands of Massachusetts homes.

The state Supreme Judicial Court’s finding came as a relief to real estate industry specialists, who said a retroactive ruling would have created chaos. Because so many home loans were bundled and sold between lenders multiple times during the housing boom, they said, it would be virtually impossible to prove that all paperwork was in place for every transaction.

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