Most states in the U.S. currently allow non-judicial foreclosures as a means of home foreclosure. Lawyers in Massachusetts who oppose non-judicial foreclosures believe they have found a way to challenge that state's law within the federal Dodd-Frank Act. The Dodd-Frank Act states that "no residential mortgage loan … may include terms which require arbitration or any other non-judicial procedure as the method for resolving any controversy or settling any claims arising out of the transaction." Foreclosure defense attorneys say that language in the Dodd-Frank Act would essentially outlaw non-judicial foreclosures and would preempt Massachusetts law.
Chuck Macdonald, whose practice focuses on representing lenders in loan and mortgage enforcement proceedings, told Minnesota Lawyer he hadn't heard of the provision in the Dodd-Frank act, nor had his colleagues in Faegre Baker Daniels' real estate litigation team. Although Like Massachusetts, Minnesota law allows foreclosure without a court order, Macdonald said an argument citing the Dodd-Frank provision would be frivolous or not credible.