Massive Win for Borrowers: New York Court Finds That “90 Day Notice” Must Be Sent to Each Borrower Separately

NY Residential Foreclosure Case

On July 21, 2022, the Supreme Court of the State of New York, County of Kings, granted the Defendants (borrowers) motion for summary judgment in HSBC Bank v. Freda Nierenberg, Reuben Nierenberg, Index No. 504903/2016.

Clair Gjertsen & Weathers, PLLC represented the winning borrowers in this action, and asserted that the bank had improperly sent notices under RPAPL 1304 by including the notice to both borrowers in one mailing. This decision upheld the recent holding made by the Appellate Court in the Second Department in Wells Fargo Bank, N.A. v Yapkowitz, 199 AD3d 126 (2d Dept. 2021).

What changes did Yapkowitz bring to foreclosure?

Briefly stated, the borrowers in Yapkowitz were a married couple that defaulted on a loan secured by a mortgage on their home. The bank sent to the borrowers in one mailing the required RPAPL 1304 notices. After some loan assignments and changes in servicing agents, the bank commenced an action against borrowers.  After the borrowers raised the issue of how the bank complied with RPAPL 1304, the lower court ultimately found that the plaintiff(bank) failed to establish its strict compliance with RPAPL 1304, which “requires a separate notice to each borrower in a separate envelope”, and dismissed the foreclosure action.  Wells Fargo Bank, N.A. v. Yapkowitz, 59 Misc.3d 1227[A], 2018 N.Y. Slip Op 50726[U], *8.

On the bank’s appeal, the Appellate Court upheld the decision and dismissed the bank’s complaint. The Appellate Court found that “notice cannot be deemed given until the date of mailing, in a separate envelope, of each 90–day “notice to the borrower” (RPAPL 1304[1]), which is read to mean a separate notice to each borrower.

Finally, the Appellate Court also recognized that permitting “a single notice jointly addressed to two or more borrowers and mailed in a single envelope to serve in lieu of a separately mailed notice to each borrower would transform the requisite standard of compliance from ‘strict compliance’ to ‘substantial compliance.’”

Therefore, the Appellate Court concluded that the lower court “properly dismissed the complaint insofar as asserted against the defendants.”

Have you defaulted on your mortgage payments and received RPAPL 1304 foreclosure notices?

You could still have legal rights to your home and potentially claim that the bank improperly mailed the RPAPL 1304 notices to you. Timing is of the utmost importance and you must speak with an attorney with knowledge of residential foreclosure and foreclosure defense.

Clair Gjertsen & Weathers PLLC has been helping people through this complex process for the last 40 years.  We offer free initial consultations to see which option is the best fit for you to stop a foreclosure auction sale to keep your home.

Please give us a call at 914.472.6202.

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