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Although it’s only been a couple of days since the Massachusetts Supreme Court handed down its ruling in the “Ibanez” case, analysts are already announcing that it won’t be as big of a deal as it might seem.

I don’t share their confidence.

Recall that in a decision released Friday, the highest court in Massachusetts declared that Wells Fargo

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[WFC  Loading...      ()   ] and US Bancorp

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[UBS  Loading...      ()   ] wrongfully foreclosed on two properties whose mortgages were unarguably in default. The court held that Well Fargo and US Bancorp had failed to show that the mortgages had been assigned to them at the time of the foreclosure.

In the Ibanez case—actually, it was two mortgage cases decided at once—the banks could not show that they were entitled to foreclose because in the case of each of the mortgages, there were holes in the chain of title that the banks could not—or did not—close.

Although the decision initially will only affect the two foreclosures in question, it’s application by lower courts in Massachusetts will make foreclosures in the Bay State far more difficult and costly for banks. The time it takes to foreclose in Massachusetts is likely to extend beyond the current 11-month period by several more months. Many more attempts at foreclosure in the state will be contested.

Basically, if your bank is foreclosing on your home in Massachusetts, you should be contacting a lawyer and planning to contest the bank’s right to foreclose right now. Foreclosure notices will now become the first step in a lengthy litigation process in Massachusetts.

The effect of this case is unlikely to be limited to Massachusetts. Other states will apply their own laws, of course. But the Massachusetts Supreme Court is regarded as one of the the best courts in the US, which means that this decision will be taken as what lawyers call “persuasive precedent” in other states.

The word that is being passed around by very smart research analysts such as Laurie Goodman at Amherst Securities is that the decision is not going to be what Felix Salmon has called a “bank-eating cancer.” She argues that while this might mean more paperwork and delays in foreclosure, banks should be able to eventually prove their case and seize the properties when borrowers default on mortgages:

One final positive note on the ruling—the court did not say that the lenders could not go back and re-foreclose on these properties. And based on what the lenders have re-documented since the initial actions, the lender should be able to restart and complete the action now, subject to the normal legal delays.

But this might be far more difficult than Goodman thinks. Let’s take the example of the Ibanez mortgage. The case involved a $103,5000 loan on a house in Springfield, Massachusetts made on December 1, 2005. The initial lender, Rose Mortgage, Inc., recorded the mortgage in the county registry of deeds the following day.

Several days later, Rose Mortgage executed an assignment of this mortgage in blank--meaning, they noted that they were assigning the mortgage but left a blank space when it came time to identify to whom the mortgage was being assigned. At some later point, the blank space in the assignment section was stamped with the name of Option One Mortgage Corporation (Option One) as the assignee, and that assignment was recorded in the registry of deeds on June 7, 2006.

As far as the court is concerned, that’s all hunky-dory. Even the fact that Option One executed an assignment in blank in January of 2006—some five months before anyone recorded to assignment to Option One—doesn’t phase the court.

What does give the court pause is what happened next, when the mortgage entered the Wall Street securitization assembly-line.