When The Borrower Says “I Wasn’t Served”


1 July, 2017


Mortgage Lender and Servicer Alerts

This one ought to be a no brainer – but it happened: if a borrower moves to vacate some aspect of the foreclosure for claimed lack of service, the plaintiff needs to oppose.  Failure to oppose may offer success for the borrower.  [See Wells Fargo Bank v. DeCesare, 148 A.D.3d 761, 48 N.Y.S.3d 497 (2d Dept. 2017)].

As lenders and services will likely be aware, lack of service is perhaps the most fertile area of defense for defaulting borrowers – and others.  It is always easy to aver that no jurisdiction was obtained.  In this regard, however, controlling principles can be of aide to the foreclosing plaintiff.  The affidavit of the process server raises a presumption of process service and it requires specific detail on the part of the person claiming lack of service to rebut that presumption.  If such detail is presented, then the burden shifts to the proponent of the service to establish jurisdiction by a preponderance of the evidence.

In the new case mentioned, the plaintiff had obtained an order of reference upon the defendant’s default, hardly unusual.  After entry of the order of reference, however, the defaulting borrower moved to vacate that order of reference and to dismiss the complaint for lack of personal jurisdiction.

While the plaintiff may have been very confident that service was good, and indeed the trial court denied the borrower’s motion to dismiss the entire case, assuming the weakness of both the protestant’s claim and the court’s recognition of that is hardly recommended.  Obviously, it would be prudent to oppose the motion to dismiss.  If service was good, it is to be hoped that the plaintiff can support that and banish the claim of lack of service, but nothing is ever certain.

Here, the borrower actually did present specificity as to the claimed lack of service and, in the absence of any opposition by the foreclosing plaintiff, the Appellate Division reversed the trial court and found that a hearing was required to determine the propriety of service.  What will have happened at that hearing is indeterminate, but more time and expense imposed upon a foreclosing plaintiff is assuredly unwelcome.

Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2017), is a partner with Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. in Garden City, New York. He is also a member of the USFN, The American College of Real Estate Lawyers, 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.