If lenders and servicers did not know how bizarre interpretation of the surfeit of rules in New York foreclosures has become (even with the benefit of our alerts which make the point) a new case confirms the message most affirmatively. [U.S. Bank, N.A. v. Boyce, 93 A.D.3d 782, 940 N.Y.S.2d 656 (2d Dept. 2012)].
Readers will be familiar with the court mandate effective October 20, 2010 (Administrative Order 548/10 superseded by Administrative Order 431/11) requiring plaintiff’s counsel in a residential foreclosure action to file an affirmation confirming the accuracy of the pleadings. For cases pending at the time where no judgment was entered, the filing was needed with the order of reference or the judgment.
This affirmation is by itself controversial and contentious, but for the moment it needs to be filed and plaintiffs’ counsel complies.
Here is what is absurd about the new case cited. Plaintiff had filed its order of reference thirteen months before the mentioned administrative order was promulgated. Obviously, then, when the order was submitted there was no obligation to file this special attorney’s affirmation.
Undaunted, the trial court denied the reference for want of the attorney affirmation! Although the court was considering the application for the reference after the affirmation became a requirement, it could not have been needed when the application was made.
Upon appeal, the order was appropriately reversed. Yes, observed the appeals court, while the foreclosing plaintiff would be obliged to file the affirmation when later applying for the judgment, no such imperative attached to the earlier order of reference.
So reason prevailed in the end and the foreclosure finally proceeded – but only at the considerable cost of an appeal and the loss of all the attendant time during which interest accrual increased the debt.
There are close calls in the law and unending nuance so that the need to sometimes pursue appeals is an understandable and acceptable aspect of litigation. But errors like this are beyond the pale and are indicative of the lender-servicer predicament in these extraordinary times. Lenders and servicers may win in the end, but it just might be a Pyrrhic victory.
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.