Servicers know this drill. It is the eve of sale and the borrower who has ignored the servicer all this time rushes breathlessly into court with an order to show cause to stay the foreclosure sale. This is typically based upon some fanciful story – or even outright misstatements.
In New York until recent years, the last minute order to show cause resulted in a stay of the foreclosure sale. The problem with that (aside from the order’s basis usually being without merit) was interest accrual, the possible need to pay an additional referee fee and the almost certain requirement to fully publish again – all sums which add up. A few years ago, however, many of the courts ceased routinely halting foreclosure sales, instead staying only delivery of the referee’s deed while the order to show cause was being decided.
It is this more usual pattern which was the subject of a recent case where it was the borrower who – as our title suggests – was hoisted on his own petard. [Equicredit Corp. of America v. Cabrero, 17 A.D.3d 520, 795 N.Y.S.2d 53 (2d Dept. 2005)].
So, the borrower’s eve of sale order to show cause failed to stay the sale which was conducted on August 1, 2003. The order did stay delivery of the deed until the motion (the order to show cause) was decided. On November 17, 2003, the motion was indeed decided, denying any relief to the borrower. (That is of course what mortgage servicers are entitled to most of the time.)
This meant that the relief the borrower wanted in his order to show cause was no longer available – the property after all was sold and the deed was delivered.
Undaunted and still aggrieved, the gutsy borrower appealed the denial of the order to show cause and here us where he met his ultimate defeat. Even had there been a reversal of the decision on the order to show cause, the relief sought was no longer available. The property was gone so that a reversal could not affect the borrower’s rights. The case became moot and that was the end of it.
Yes, borrowers’ assaults on foreclosures can seem interminable. But there does come a time when the law says “its over”.
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.