While by now this should be an old story for lenders and servicers involved with New York mortgages, the need to send a pre-foreclosure notice per RPAPL §1304 to the borrower in the home loan foreclosure case is a constant source of lender and servicer defeats when foreclosures are started. It is truly astonishing. While there is no doubt that lenders get it right at least some of the time (maybe most of the time) it seems that a majority of the reported cases—primarily the ones that are appealed—rule against the mortgage holder. Typically the issue arises at the summary judgment stage so if the foreclosing plaintiff loses there—especially after an appeal—the time consumed by the process is both extraordinary and meaningful.

In parsing the foreclosing party’s losses, most often the mortgage holder is found unable to demonstrate mailing of the 90-day pre-foreclosure notice. That results in denial of a motion for summary judgment (or an order to appoint a referee) with the necessity then to either conduct a trial on the issue of service of the notice, or the need on the part of the mortgage holder to discontinue the action and start all over again. It should be apparent that either choice is both expensive and time consuming.