Defend yourself Against Foreclosure in NY

Stop Foreclosure in NY: Bank Lacked Legal Standing

Case Law
Fremont Inv. & Loan v McBean
2007 NY Slip Op 52229(U) [17 Misc 3d 1132(A)]
Decided on November 26, 2007

This is an application for the issuance of an order for reference before the Supreme Court, Kings County.

The factual backdrop of the case is as follows: Defendants McBean loaned $ 420,000.00 from Fremont and secured by a mortgage which was subsequently registered in the Office of the City Register of the City of New York, New York City Department of Finance by MERS as nominee of Fremont.

Fremont claimed that defendants defaulted and failed to make the proper payments based on the note and mortgage executed. An affidavit of merit was executed by the Vice President of Fremont in accordance with Civil Practice and Law Rules (CPLR) Section 3215(f) and affirmed by Heather C.M. Rogers, Esq., associated with Davidson, Fink, Cook, Kelly & Galbraith, LLP. The motion for an order of reference was unopposed and was submitted for decision.

The Court upon review discovered that MERS executed a satisfaction of the mortgage of McBean. It further appeared that McBean sold the mortgaged premises to Chris Chance and therefore the borrower McBean had sufficient funds to pay Fremont.

The counsel for the Plaintiff failed to inform the Court of this event. It could have filed a motion to discontinue the instant application. Had the court proceeded with its decision, it would have wasted scarce resources as well as may have damaged the credit rating of the defendants.

Plaintiff’s counsel clearly failed to observe due diligence in apprising the court that the resolution of the application for the order of reference was no longer necessary. Plaintiff also was not the proper party to seek relief considering that it lacked standing since it is no longer the mortgagee.

Court ordered the dismissal of the instant application with prejudice, cancellation of the notice of pendency in the action to foreclose mortgage, dismissed the action for foreclosure with prejudice and ordering the counsel for plaintiff to appear in a hearing relative to the imposition of sanctions for engaging in frivolous conduct of filing a motion for judgment and foreclosure without merit in law and asserting factual statements that are false in accordance with NYCRR § 130-1.1 (2).

Lesson Learned: This case was filed before the Supreme Court, Kings County. The significance of this case is the failure of the counsel for a party to a case to observe due diligence in ascertaining the factual basis for filing of the necessary pleadings in court. A lawyer is required and is expected to be circumspect in preparing legal documents and diligent in knowing fully and completely the case that he handles. This is professional ethics that every lawyer should observe not only with respect to his clients but also with respect to the court. Engaging in frivolous conduct constitutes an administrative disciplinary offense and may warrant the imposition of penalties by the court after due process and opportunity to be heard is accorded to the lawyer

Written by Kevin Levonas and Giselle G.