The Second Department published
the attached decision yesterday entitled Wells Fargo v. Eisler. I
have attached the relevant point heading from Wells Fargo’s brief which set
out the then current state of the law. The issue was whether the
bank adequately proved that it sent the attached unsigned notice of
default/acceleration letter. It is undisputed that the mailing of
this letter is a condition precedent to starting a foreclosure action pursuant
to the terms of the mortgage. Banks across America are unable or
unwilling to provide any information as to the identity of the purported
sender. The affidavit provided is quite typical of those routinely used
by banks in foreclosure actions. In essence, a bank employee swears that
based on a review of the books and records of the bank (here Wells) the notice
of default letter “was sent.” In my experience, this key provision is
always written in the passive voice.
For years, banks have
successfully argued if the default letter is contained in their business
records, it must have been sent.
This panel had two of the same
Justices from the Bank of New York v. Silverberg panel.
Although I was hoping for a more strongly worded decision, the
holding is clear: the bank didn’t prove it sent the notice of
default/acceleration letter.
The Court wrote: “The
unsubstantiated and conclusory statements in this affidavit, which indicated
that the required notice of default was sent in accordance with the terms of
the mortgage, combined with a copy of the notice of default, failed to show
that the required notice was mailed by first class mail or actually delivered to
the notice address.”
The Court affirmed the order of
Justice Aliotta of Richmond County.
This case will have widespread
ramifications on foreclosure actions. The vast majority of foreclosures
in New York State have mortgages with provisions which require a notice of
default be sent. In my opinion, lower courts can use this decision
to clear their dockets and dismiss the majority of foreclosure actions.
