30-Day Notice: Lender Whiffs
Lenders or servicers should not lose foreclosures like this! [See recent case HSBC Bank USA, N.A. v. Shulman, ___ A.D.3d ___, ___ N.Y.S.3d ___ (2d Dept. 2025.)]
The lender sent the 30-day notice required by the mortgage but it was not up to standard; it failed to adhere to the (easy) requirements. The result, which highlights why the point can be so meaningful (read: dangerous) to lenders, was dismissal of the foreclosure, after judgment was granted, and upon borrower’s appeal. Who wants to add up the lost time (years), accruing interest and elevating legal fees?
In these pages, the notice problem analyzed most often involves the RPAPL § 1304 statutory 90-day pre-foreclosure notice. Not this time. The Fannie Mae / Freddie Mac uniform instrument (of course pervasive throughout the industry) has for as long as most people could remember contained a provision requiring that as a condition of accelerating a mortgage a 30-day notice had to be sent containing certain special language – essentially affording a 30-day notice and cure period to the borrower. [For expanded detail with case citations see 1 Bergman On New York Mortgage Foreclosures § 4.04A, Lexis Nexis Matthew Bender (rev. 2025).]
Around the early nineteen nineties, this was a bugaboo for foreclosing parties; indeed many a foreclosure action was torpedoed by neglect to comply with the contractual obligation regarding the 30-day notice. But after a few years the difficulties were addressed and essentially resolved so that foreclosing parties thereafter seldom stumbled in assuring compliance with the 30-day notice provision. After all, the mortgage clause stated what the notice needed to say and the mortgage dictated the mode of transmittal. While there certainly were nuances to this, ultimately it became routine to simply comply with the language.
And yet, in 2025 a foreclosing lender managed to miss compliance – per the title, it whiffed.
As the court observed, a notice of default need only substantially comply with the terms of the mortgage. Of course, the foreclosing party can and should do better than that, which is to comply precisely rather than chance the risk of depending upon the definition of “substantially comply”.
Here, the standard paragraph required that the lender must provide the borrower with “at least 30 days from the date on which the notice is given” to correct the default. How could the lender miss that one? Someone decided that the letter should recite that the specified amount must be received “within 30 days from the date of the letter”. As the court correctly observed, 30 days within is less time than “at least 30 days” as mandated by the mortgage. The court was therefore correct in dismissing the case for want of the proper predicate notice.
Highlighting the two major concepts focused upon here: a) it is effortless for a foreclosing lender to comply with the contractual obligation for a 30-day notice (when so provided) and b) failing comply portends years consumed in litigation.
Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2024), is a partner with Berkman, Henoch, Peterson & Peddy, P.C. in Garden City, New York. He is also a member of the The American College of Real Estate Lawyers, a fellow of The American College of Mortgage Attorneys, an adviser to the New York Times on foreclosure issues and writes a regular servicing column for the New York Law Journal. He is AV rated by Martindale-Hubbell, his biography appears in Who’s Who In American Law and he has been for years listed in Best Lawyers In America and New York Super Lawyers.