[Originally published 1/05/12]
By: Bruce J. Bergman
Member, Berkman, Henoch, Peterson, Peddy
& Fenchel, P.C.;
Author, Bergman on New York
Mortgage Foreclosures, 3 vols, LexisNexis Matthew Bender (rev. 2011)
arises all the time. During the course
of a mortgage foreclosure action, the note and mortgage (or whatever the more
extensive mortgage documents may be) are assigned by the foreclosing plaintiff. Is there a mandate to make a motion to change
the caption of the action to reflect the name of the new mortgage holder as the
The answer is no,
as a matter of New York statute (CPLR §1018) and case law, confirmed as recently as October,
2011 [Citimortgage, Inc. v. Rosenthal,
88 A.D.3d 759, 931 N.Y.S.2d 638 (2d Dept. 2011). [enhanced version available to lexis.com subscribers]. For those who may want to delve more deeply into case law and nuances on
this subject, see 2 Bergman on New York Mortgage
Foreclosures §23.46, LexisNexis Matthew Bender (rev. 2011).
Why this is
particularly relevant as a practical matter is highlighted by the mentioned new
case. The borrower delivered a mortgage
in 1988 to A, immediately assigned to B.
In 1994, B assigned to C. In
early 2008, C assigned to Citibank which, upon encountering a default, began a
foreclosure in July, 2008.
On July 1, 2009
the judgment of foreclosure and sale was signed. Thereafter, and as is not uncommon, in May,
2010, Citibank assigned the mortgage to PennyMac. A sale was scheduled for July, 2010,
intercepted by the borrower's order to show cause alleging lack of standing (to
be addressed in a separate alert) and, relevant to this review, the charge that
the foreclosure could not proceed because PennyMac (plaintiff Citibank's
assignee) had not been formally substituted as plaintiff.
Not so ruled the
court (based upon established case law and the noted practice statute) -
although the ultimate real life mischief was that while the foreclosing
plaintiff won on this point in the trial court, the borrower appealed. The mortgage holder won there too, but
victory came fifteen months after the originally scheduled sale date.
So, it helps to
be right on the law - and servicers and practitioners should be familiar with
this principle - but being correct didn't stave off time and expense.
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Bruce J. Bergman is the author of Bergman on New York Mortgage Foreclosures, LexisNexis Matthew
Bender (rev. 2011). He is a graduate of Cornell University and Fordham Law
School and admitted to practice in New York and Washington, D.C. He is a
partner in the Garden City, New York law firm of Berkman, Henoch, Peterson, Peddy, & Fenchel PC where he
concentrates in the areas of real estate litigation and mortgage foreclosure.
In addition to his law practice, he serves as a consultant to the New York
Times on mortgage law, is an Adjunct Associate Professor of Real Estate at New
York University's Real Estate Institute where he has taught the mortgage
foreclosure course, is a special lecturer on law at Hofstra Law School and has
authored more than 380 articles on the subjects of mortgage foreclosure, real
estate and construction law which have appeared in scholarly journals and
professional publications throughout the country.
for his regular columns on mortgage foreclosure in both the New York Law
Journal and the New York Real Property Law Journal and as a lecturer in his
field for judge's groups, the New York State Bar Association, New York County
Lawyers Association, the Nassau Academy of Law, Consumer Bankers Association,
New York State Land Title Association, Professional Education Systems, Suffolk
Academy of Law and the National Business Institute among many others, Mr.
Bergman is both a past Director and four-term Chairman of the Real Property Law
Committee of the Nassau County Bar Association as well as a former Associate
Dean of the Nassau Academy of Law. Among his memberships are the American
College of Real Estate Lawyers, American College of Mortgage Attorney, Scribes
the American Society of Writers on Legal Subjects, the American and New York
State Bar Associations, and the New York Land Title Association. He was a City
Councilman in Long Beach, New York, from 1980 through 1988.
referenced herein is provided for educational purposes only. For legal advice
applicable to the facts of your particular situation, you should obtain the
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