As surprising as it may seem, some foreclosure cases in New York have literally turned on the difference between a staple and a paper clip. The import of this otherwise inane difference stems from the requirement that, in order to establish standing to commence a foreclosure, the lender must establish that it is the lawful holder of the note.
Justin J. Santolli, special counsel at Fried Frank.
If the lender is not the originating lender, but a subsequent transferee, courts have generally required that the transferee lender show an assignment of the note through an allonge that is “firmly affixed” to the note. Hence, the distinction between a staple and a paper clip can become critical, and the “firmly affixed” requirement has proved a fruitful avenue for borrowers to attempt to challenge (or delay) a foreclosure.
Shira Sandler, associate at Fried Frank.
