The Ibanez Property Ring: A Surprising Hidden Story Behind a Significant Foreclosure Lawsuit

Abstract

In late 2005, at the peak of property fever in Massachusetts and of loose mortgage lending standards nationwide, a man sat down with the same seller, the same lender, and the same notary to buy two houses at once. The same man repeated the same steps with two new properties the following month, and did so yet again the month after that.

Property records suggest that he defaulted on all six mortgages within a year. Within a year and half after the first purchase, lenders had foreclosed on all six properties. The chance observation of a particularly attentive judge led one of those properties to become the subject of a landmark case, which enforced a Massachusetts property doctrine inherited from medieval England.

This essay documents the serial purchase of all half dozen properties and describes the facts as they are available in the public record. These details tell a side of the story that is shockingly different than the narrative portrayed by the justices of the high court.

The fuller picture reflects an incredible array of questionable decision-making. This is true not only of the buyers, sellers, and banks, but also of the media, of the public-minded organizations and individuals that represented or supported the buyers, and of the courts that chose to invalidate the foreclosure in question.

Keywords: property law, mortgage law, foreclosure law

JEL Classification: K10, K11, K12