Problems with the mandated pre-foreclosure 90-day notice in the home loan case are well-trodden ground – lenders too often suffer foreclosure dismissal for want of demonstrating that the notice was sent. Most of the missteps, particularly those addressed in these alerts, focus upon the inability of the foreclosing party to actually prove that the notice was sent in the fashion mandated by statute (RPAPL §1304). Usually this is because the person swearing to the mailing or office procedure does not have the requisite familiarity with the business records.
But a recent case (and one not quite as newly minted) exposes a different peril: procedures when there is more than one borrower. And the issue might not be so obvious.
In one case, the borrowers were husband and wife, commonplace of course. [Aurora Loan Services LLC v. Weisblum, 85 A.D.3d 95, 923 N.Y.S.2d 609 (2d Dept. 2011)] Although there were two borrowers, the notice was sent solely to the husband. Good enough? No said the court. The lender argued that both borrowers participated in the required settlement conference and there was accordingly no prejudice to the borrowers, further that notice to the husband was constructive notice to the wife. No again ruled the court – notice must have been sent to each.
How about a letter addressed to Mr. and Mrs. (Borrower)? That won’t suffice either. [Wells Fargo Bank, N.A. v. Yapkowitz, 2018 NYLJ LEXIS 2000]. There can be no assumption that one spouse will show the correspondence to the other. Two separate envelopes must be sent (and of course there must be proof of that as to both).
Another pitfall exposed.
Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2018), 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.