How Tough Is It To Foreclosure A Mortgage In New York?
To answer the question upfront, “pretty tough”, as a recent case hammers home. [SPR 2012-4, LLC v. Shamin, 235 A.D.3d 926, 227 N.Y.S.3d 692 (2d Dept. 2025)].
The importance of the question and the answer should be apparent: whenever a foreclosure action is delayed or dismissed, time, and resultant interest, accrue as do legal fees. Delay ultimately has the potential under some circumstance to render a foreclosure action unenforceable by virtue of expiration of the statute of limitations. Experienced lenders and servicers know that these things actually happen.
While it may be a matter of perspective or viewpoint, the result of the recent cited case might be seen as truly an extreme example. The ruling in the cited case was, on its face, reasonably benign. A borrower’s motion to vacate a judgment of foreclosure and sale was granted. Well, there could be good reason for that, although a prominent question here is whether such a good reason existed.
The plaintiff made its motion for judgment of foreclosure and sale and the court issued its decision. The borrower had opposed the judgment motion, and the lender had replied to the borrower’s opposition. Unfortunately, and for unclear reasons, when the court wrote its decision it did not recite the opposition and the reply as having been considered in its deliberations. It is not certain from the case whether the court did or did not actually consider those two submissions. In any event, the borrower made a motion to vacate the judgment on the very ground that the decision did not recite all the papers submitted. The trial court adhered to its decision – the judgment remained – and the borrower appealed.
On the appeal, it seems that the borrower apparently made its arguments (presumably anew) as to why the foreclosure judgment should not have been granted in the first place. The appellate court ruled, in reversing the trial court holding that the judgment must be vacated for want of either recitation or consideration of the opposing papers and the reply. It also stated rather astonishingly that it was appropriate to vacate “without regard to whether the [defendants]…demonstrated a potentially meritoriously opposition to the…motion”. [HSBC Bank USA, N.A. v. Haylett, 190 A.D.3d 839, 840, 136 N.Y.S.3d 742; see U.S. Bank N.A. v. Dickenson, 176 A.D.3d 891, 891, 107 N.Y.S.3d 885].
Ultimately, therefore, the borrower was able to present its arguments to the court to consider. The court could have reviewed them (this is on the appeal) and if determining that they meritorious, vacate the judgment on that basis. It seems, though, that the court was prepared to vacate the judgment solely on the ground that the decision granting the judgment in the first place did not recite consideration of the opposition to the judgment motion (and the reply). One might want to argue that this is conspicuous form over substance. If the court could consider the merits, as was seemingly available, but declined to do so, even though the foreclosing plaintiff was not at fault. The only infirmity was that the court did not recite (or initially consider) the opposition. It was all there on the appeal to be assessed, but that didn’t seem to matter.
Lenders might argue that it should matter.
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.