Provident Funding Associates, LP v. Jones, 31 Mass. L. Rptr. 37 (2013)

Citation: Provident Funding Associates, LP v. Jones, 31 Mass. L. Rptr. 37 (2013)
Parent Document: Provident Funding Associates, LP v. Jones, 31 Mass. L. Rptr. 37 (2013)
Jurisdiction: Massachusetts (state)
Effective Date: 2013-02-27
Original Source: https://www.courtlistener.com/opinion/8358209/provident-funding-associates-lp... ↗

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Whüe Mr. Dunphy’s sale of the Property to Ms. Santos for twice his recent purchase price was discoverable with minimal investigation and could put Provident on notice of suspicious circumstances, this fact alone does not impose a duty upon a mortgagee to investigate the legality of the sale. Cf. Patrocinio v. A.M.R. Realty, LLC, 28 Mass. L. Rptr. 211, 213 (Mass.Super. 2011) (“In Massachusetts, the lender-borrower relationship is regarded as being at arms length. Thus, no special duties are imposed on the lender . . .”), citing Shawmut Bank, N.A. v. Way man, 34 Mass.App.Ct. 20, 24 (1993). Compare Johnson v. Deutsche Bank Natl Trust Co., 2011 Cal.App. Unpub. Lexis 6351 (Cal.Ct.App. Aug. 23, 2011) (finding warning signs “sufficient to prompt a reasonable inquiry” by the mortgagee where there was a discrepancy in the chain of title, rapid multiple conveyances and steep appreciation, the original owner remained in continuous possession and the original owner recorded a lis pendens against the property); Thomas v. LaSalle Bank Nat’l Assoc., 913 N.Y.S.2d 742, 744 (N.Y.App.Div. 2010) (recognizing that a “mortgagee is under a duty to make an inquiry where it is aware of facts that would lead a reasonable, prudent lender to make inquiries of the circumstances of the transaction at issue”) (citations and internal quotations omitted). Massachusetts has yet to impose such a duty upon a mortgagee. Therefore, the defendants have failed to establish that Provident was not a bona ñde purchaser.

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