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Affordable Housing Covenants Have Protected Status in Foreclosures

The Boston Redevelopment Authority d/b/a Boston Planning and Development Agency has the right to challenge a foreclosure that purportedly terminated a covenant restricting the use of property to affordable housing.

In allowing the BPDA’s suit to move forward, the Business Litigation Session of the Suffolk Superior Court recognized two truisms of Massachusetts foreclosure law. First, the foreclosing lender owes a duty of good faith and reasonable care to the borrower and holders of junior encumbrances or liens. If that duty is breached, the foreclosure sale could be invalid.

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