Onewest Bank later moved to confirm the referee’s report and for a judgment of foreclosure and sale. On August 1, 2024, the Supreme Court granted the motion, confirmed the referee’s report, and directed the sale of the property. The Thomases appealed, arguing that Onewest Bank had not proven its standing and had not strictly complied with the statutory and contractual notice requirements.
The Appellate Division reviewed the trial record and found that Onewest Bank failed to establish its standing to foreclose. The court noted that, in a foreclosure action, the plaintiff must prove it was the holder or assignee of the note at the time the action was commenced. The bank’s witness testified that the allonges, which were supposed to show Onewest Bank’s right to enforce the note, were not stapled to the original note and that he did not know when the allonges were executed or attached. The court found this insufficient to establish standing.
The court also examined whether Onewest Bank had strictly complied with the notice requirements of RPAPL 1304 and the mortgage agreement. RPAPL 1304 requires that a 90-day notice be sent to the borrower by both registered or certified mail and first-class mail before starting a foreclosure action. The mortgage agreement also required a default notice to be mailed or delivered. The bank’s witness did not have knowledge of the mailing practices of the entity that sent the notices, and the business records submitted did not show the required mailings or delivery had actually occurred.
Because Onewest Bank failed to prove both standing and strict compliance with the notice requirements, the Appellate Division reversed the lower court’s order and judgment of foreclosure and sale. The court denied the bank’s motions and dismissed the foreclosure complaint against the Thomases.
For mortgage professionals, this decision highlights the importance of having clear proof of standing and strict adherence to statutory and contractual notice requirements before proceeding with foreclosure. The outcome shows that courts will closely scrutinize whether all legal steps have been followed, and that missing documentation or unclear procedures can result in dismissal of a foreclosure action.