Tuesday, December 24, 2019

New Law: Foreclosure Standing Never Waived - Renew Your Case Today

On December 23, 2019, S5160 was enacted and "the defense, in a mortgage foreclosure action, of the plaintiff's lack of standing is not waived because of the defendant's failure to raise such defense in his or her responsive pleading."

A standing defense is utilized to argue that the plaintiff is not the right party to sue in that it's not the owner of the mortgage or debt and has not been appointed the power by such owner to pursue the lawsuit. This is one of the most significant changes to the foreclosure litigation practice since the Great Recession and will impact litigation for years to come.

Real Property Actions and Proceedings Law section 1302-a is an early Christmas present to defendants in ongoing litigation as it took effect immediately and appears to apply up until sale even if a Judgment of Foreclosure has already been ordered. Specifically, the new section states that "[a] defendant may not raise an objection or defense of lack of standing following a foreclosure sale." As such, it appears the defense of standing can be raised at any time before the sale.

If you are defending a case that is post-Judgment of Foreclosure and Sale and pre-auction sale, you may want to consider bringing an Order to Show Cause with a Motion to Renew pursuant to Civil Practice Law & Rules Rule 2221-e immediately.

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