An Appellate Division, Second Department decision reinforces that lenders must document their compliance with all notice requirements under the mortgage documents before bringing a foreclosure action. The mortgage agreement in Wells Fargo Bank, N.A. v. Eisler, 2014 N.Y. Slip Op. 4753 (App. Div. 2d Dep’t June 25, 2014), contained a provision, typical of such agreements, that required the bank to deliver a notice of default to the borrowers before commencing a foreclosure action. In a foreclosure action, the homeowner-borrowers denied that they had received any such notice. The bank asserted that it had given the notice, and submitted an affidavit from one of its employees. In the affidavit, the employee swore requisite notice of default was sent in accordance with the terms of the mortgage, and attached a copy of the notice that had allegedly been sent.
The Appellate Division found this evidence of notice insufficient and dismissed the foreclosure action. It rejected the affidavit as consisting of merely “[u]nsubstantiated and conclusory statements,” which “failed to show that the required notice was mailed by first class mail or actually delivered to the notice address if sent by other means, as required by the mortgage agreement.”
This case suggests that foreclosing lenders – and by extension, parties required to prove that they gave sufficient notice under other types of contract provisions – should maintain and submit more detailed proof that notice was given in the manner required under the agreement. Such proof should set forth, among other things, the name of the person who gave the notice, when it was given, and precisely how. In addition, the credibility and reliability of proof of notice can be enhanced by good practices such as preparing an affidavit of service of notice at the time the notice is given (rather than months later when litigation ensues) and annexing to such affidavit a copy of the notice and the envelope in which it was given.