January 2012

David J. Pellegrino, Esq.

Charles A. Lovell, Esq.

On January 5, 2012, U.S. District Court Judge John J. McConnell, Jr. issued an order appointing Ms. Merrill W. Sherman special master over a docket of cases consolidated as In re: Mortgage Foreclosure Cases, Misc. No. 11-mc-00088-M-LDA, in the U.S. District Court for the District of Rhode Island (the “Order”).  The Order tasks the special master to “explore all possibilities for the potential settlement of these claims[.]”  Ms. Sherman’s appointment comes while the parties still await the Court’s decision on the pending Magistrate Judge’s Reports and Recommendations which determined that, under Rhode Island law, the mortgagor borrowers do not have standing to bring their claims.

The Order continues the Court’s previous August 16, 2011 order staying any and all actions in the consolidated cases until the Special Master certifies “that all attempts at negotiating a settlement have failed after good faith attempts by all parties.”  (Emphasis in Order).  While the Court finds it problematic that the plaintiff mortgagors have stopped paying on their obligations, the Order effectively enjoins any foreclosure if a mortgagor borrower files a complaint in the U.S. District Court for the District of Rhode Island. 

Even though the Court has not yet made a final ruling as to whether or not it has subject matter jurisdiction, on January 11, 2012, the Court ordered all parties’ counsel to appear at a meeting with the appointed Special Master on February 3, 2012.

Click here for the previous eAlert "RI Federal Court issues order Staying Certian Foreclosure Challenge Casses"

If you have any questions about this topic, please contact:

David J. Pellegrino, djp@psh.com, 401-681-1915

Charles A. Lovell, cal@psh.com, 401-681-1912