A foreclosing mortgage lender has a number of tools to enforce its rights and protect its collateral, including some that are equitable, some contractual and some statutory.  One of the most powerful lender rights has traditionally been the appointment of a receiver to monitor and marshal the collateral as necessary, which can be both contractual and statutory.

Recently, this longstanding and powerful lender right has been called into question by the New York State Supreme Court, New York County, in a recent slip opinion in the foreclosure case of Wells Fargo Bank, N.A. v. JTRE 240 E. 54th St. LLC, No. 850091/2022, slip op. (Sup Ct, New York County 2022) (“Wells”) when it denied the lender’s motion for the appointment of a receiver.