Timely response to prevent foreclosure in New York

Homeowner must respond timely to prevent foreclosure in New York

NYCTL 1996-1 Trust et al., Respondent, v. Elspeth King et al., Respondents,
Ralph Cannon, Appellant, et al., Defendants. (Index No. 24900/97)

Case Law
2002-05703
SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT
304 A.D.2d 629; 758 N.Y.S.2d 374; 2003 N.Y. App. Div. LEXIS 3938

February 11, 2003, Argued
April 14, 2003, Decided

Facts: A was the owner of real property subject to recorded real estate tax liens. In July 1997, B as purchaser of the tax lien, commenced this foreclosure action. A did not appear or interpose an answer. Consequently, on May 26, 1999, a judgment of foreclosure was entered against her by virtue of the default judgment.

On December 30, 1999, A conveyed the property by quitclaim deed to C. On July 26, 2000, seven months after A conveyed the property to C by quitclaim deed, A moved to vacate the default judgment, claiming she was never properly served with process.

Issue: Whether A can move to vacate the default judgment alleging lack of service of process.

Ruling: No. A lacked standing to contest the judgment and the foreclosure sale because she conveyed the property before filing her motion. She never participated in the foreclosure case hence a judgment by default was entered in the record. Then she sold the subject property to a third person. She cannot now argue that the foreclosure sale be vacated on ground there was no service of notice.

Lesson Learned:If a debtor feels that there is a violation in the procedural due process in foreclosing the mortgaged property, he should bring a proper action in a timely fashion. The law always favor those who exercise his rights seasonably.

Written by Kevin Levonas and Jerry L.