On December 1, 2009, the Appellate Division of New York's Supreme Court, Second Department, affirmed a trial court's dismissal of a foreclosure action that had been commenced by Countrywide Home Loans, Inc. ("Countrywide"). In the subject case, Countrywide was not assigned the mortgage and underlying note until after five months after the foreclosure action was commenced. The Court ruled that Countrywide did not have a legal or equitable interest in the mortgage at the time the action was commenced, a defect that could not be cured retroactively through the subsequent execution of an assignment.

The Court's decision was entered in the matter entitled Countrywide Home Loans, Inc. v. Gress, 2009 NY Slip Op 08989 (App. Div. 2009).

With this decision, New York joins the ranks of several other states which have strictly applied rules relating to standing to prevent the entry of foreclosure judgments without admissible evidence of the lender's standing. In answering a foreclosure complaint, borrowers are well advised to raise, as an affirmative defense, the plaintiff's lack of standing to foreclose.

Return to NY Info Page