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Empire Justice Memo of Support: Provide Clarity Regarding Standing to Sue in Foreclosure Actions

February 17, 2015


A.247 (Weinstein)

This bill provides a homeowner defendant the right to challenge standing at any time they learn that the plaintiff may not be the rightful party during a foreclosure proceeding.  This legislation clarifies RPAPL 1302 and conflicting case law regarding whether such defense must be raised in the answer to the complaint, or in a pre-answer motion or be waived, or whether standing is akin to a party’s capacity to sue and therefore cannot be waived. 

Standing in foreclosure cases has been interpreted by some courts as a defense that must be raised in the answer or through a pre-answer motion by the defendant, or it is deemed waived.  Even if the homeowner discovers at a later point in the litigation that the plaintiff is not the owner, borrowers have been barred from defending motions for summary judgment or filing motions on these grounds.

At the time the answer is due (within 20 or 30 days of being served with the complaint) defendants may lack sufficient information or reason to challenge whether the plaintiff is the rightful owner.  Standing has been a very real and big issue in foreclosure cases, with numerous examples of lawsuits being filed by parties that did not legally own the mortgage note.  The current state of the law necessitates that homeowner defendants should file a pre-answer motion and/or raise standing in their answer in every case just to preserve the defense in the event that information surfaces showing that the plaintiff is not the rightful party to sue.  This interpretation of the law is inefficient and, more so, it has proved difficult for many defendants who lack information and/or legal counsel and fail to raise standing in their answer. 

Foreclosure cases have proceeded to judgment and sale in which the plaintiff was not the rightful owner and holder of the mortgage note, but where the homeowner was barred from raising standing as a defense because they failed to raise it in the initial answer.  A foreclosure that proceeds to judgment and sale by the wrong party is not only unjust, but it may very well have negative implications for future homebuyers.   
Empire Justice Center strongly supports this legislation and urges immediate passage of A.247.

For more information, please contact:

Kirsten E. Keefe

Empire Justice Center
119 Washington Avenue
Albany, NY  12210 

(518) 462-6831
(518) 935-2852