Borrowers Cannot Vacate Final Judgment Of Foreclosure Because They “Read Something Wrong”

This might have seemed obvious, but the Appellate Division nonetheless recently confirmed that a borrower's claim that it "read something wrong" could not establish "excusable neglect" sufficient to vacate a final judgment of foreclosure.

In New Jersey Housing and Mortgage Finance Agency v. Wolinski, borrowers defaulted on their mortgage and their lender filed a foreclosure complaint. The first complaint named borrowers and "John Doe and Jane Doe 1-10 (Names Being Fictitious) Tenants/Occupants." This complaint was voluntarily dismissed against all parties, real and fictitious. The second complaint, filed approximately six months later, also named borrowers and "John Doe and Jane Doe 1-10 (Names Being Fictitious) Tenants/Occupants." This complaint was also voluntary dismissed, but only as to the fictitious defendants.

Borrowers never answered the complaint and the lender filed a request to enter default, and then obtained final judgment by default. The lender scheduled a sheriff's sale but the borrowers filed for bankruptcy protection. The lender moved to lift the bankruptcy stay. After this motion was granted, the borrowers moved to vacate final judgment. They argued: (1) that they misread the dismissal of the second foreclosure complaint to be, like the dismissal of the first one, a dismissal of all defendants, not just the fictitious ones; and (2) that the trial court abused its discretion when it allegedly miscalculated the amount due in the final judgment. The Appellate Division rejected both of these arguments.

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The Latest Wave In The Foreclosure Crisis? Another Bank Branch Foreclosed Upon By Borrower

by: Peter J. Gallagher

Several weeks ago, we brought you the story of a Philadelphia man who foreclosed on his local Wells Fargo branch ("Turning The Tables: Philadelphia Man Forecloses On Wells Fargo Branch") after the bank failed to pay a judgment the man obtained against the bank for violating the Real Estate Settlement Procedures Act. The bank eventually paid. Well, now it has happened again.

In Florida, which should just change its name to the "Foreclosure State" at this point, a couple recently received a foreclosure complaint from Bank of America. Nothing too strange in this day and age, except that the couple had paid for their home in full and in cash when they purchased it. As the Naples News reported — in the cleverly titled "Tables Turned, Bank Pays Up In Mistaken Foreclosure Case" — the homeowners were forced to hire a lawyer, who spent weeks on the phone and in court before the case was dismissed, costing the homeowners $2,500 in legal fees. The court ordered the bank to pay these fees, but after five more months of phone calls, neither the bank nor its local counsel had paid.

This is where the story gets interesting. The homeowners' lawyer obtained a writ of execution from the local sheriff in connection with the debt and took it with him — along with local media, sheriff's officers, and a moving van — to a local Bank of America branch and demanded payment or the branch would start losing furniture, money in the cash drawers, and any other assets needed to satisfy the debt. Not surprisingly, the branch manager quickly cut a check to the couple for the outstanding amount. In a written statement, Bank of America apologized to the homeowners and did the only thing it could do, blame the law firm that had been representing the company, which has since gone out of business, for failing to respond to the homeowners' requests.

What’s In A Name? Identifying Servicer, Not Lender, Inadequate Notice Of Intent To Foreclose Under New Jersey’s Fair Foreclosure Act

by: Steven P. Gouin

The New Jersey Chancery Division has reaffirmed that substantial compliance with New Jersey’s Fair Foreclosure Act (“FFA”) is not enough to overcome a motion to dismiss a foreclosure complaint. In Bank of New York Mellon v. Elghossain, the Chancery Court noted that the issue of whether a mortgage servicer’s Notice of Intent to Foreclose (“NOI”) satisfies the FFA’s statutory mandate that notice be provided by the lender, had not yet been decided in New Jersey. Ultimately, the Court held that, where an NOI identifies only the servicer and not the lender, the NOI is deficient and the foreclosure complaint should be dismissed without prejudice.

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