Court ruling voids two Mass. foreclosures

A ruling by Massachusetts' highest court has voided two foreclosures over documentation issues in what could be the next step in the ongoing robo-signing controversy.

Judges in Massachusetts reversed two foreclosures because the banks that had foreclosed on the properties weren't able to prove that they actually owned the properties, because there wasn't a clear chain of ownership in the documentation surrounding the homes.

"It's about the most extensive beat-down the banks have received over their shoddy practices," Christopher Peterson, a real estate law professor at the University of Utah, told CNNMoney.

Because Massachusetts has very clear foreclosure documentation laws, it's unclear whether the ruling will carry over into the Houston real estate market. Officials with Wells Fargo said that the ruling just sets out processes for Massachusetts law. However, it could disrupt the sale of foreclosures regardless.

That uncertainty could cause issues with the real estate market. According to the National Association of Realtors, distressed properties made up 33 percent of existing-home sales nationwide in November.