New York Senate Bill S5160 amends the real property actions and proceedings law, in relation to the failure to raise the defense of lack of standing in a mortgage foreclosure action. It has been signed by the Governor and is effective immediately. https://www.nysenate.gov/legislation/bills/2019/S5160
Section 1 amends the Real Property Actions and Proceedings Law by adding a new section 1302-a, which would provide that any defense based on a plaintiff’s lack of standing in a foreclosure proceeding related to a home loan cannot be waived by a defendant’s failure to raise such a defense in a responsive pleading or pre-answer motion. A defendant would not be able to raise the defense after a foreclosure sale, unless the judgment of foreclosure and sale was issued upon the defendant’s default.
This bill fundamentally changes the standing argument in New York. There is a volume of caselaw which reflects that the Mortgagor waives affirmative defense that mortgagee lacked standing to bring foreclosure action by not raising defense in his answer or in a timely motion to dismiss, but instead raising defense for the first time in opposition to mortgagee’s motion for summary judgment. Wells Fargo Bank Minnesota, Nat. Ass’n v. Mastropaolo, Supreme Court, Appellate Division, Second Department, New York.May 29, 200742 A.D.3d 239837 N.Y.S.2d 2472007 N.Y. Slip Op. 04626. We can be assured that this change will create a new wave of appeals and litigation as the Courts respond.
For more information regarding this law, please contact Deborah Gallo, Director of Operations at [email protected]