John Caher, New York Law Journal

A mortgage lender that failed to comply with new “consumer-friendly” notice requirements has been given a second chance to get it right, but not at the borrower’s expense.


Acting Supreme Court Justice Richard Dollinger (See Profile) of Rochester said that if he simply dismissed the foreclosure for failure to provide adequate notice, as several courts have done to address violations of the Foreclosure Prevention, Tenant Protection and Property Management Act of 2009, the borrower will be in worse shape than if he had never challenged the bank, and the bank would escape any ramifications for its errors.


“At the end of the process, the borrower will be no better off because he remains liable for the entire unpaid debt under the loan documents,” Dollinger wrote. “In fact, the borrower is worse off because the amount of the debt has increased during the two-year period in which this foreclosure action has been pending, making a recasting of the mortgage more costly, if not prohibitively so.”


So in Kearney v. Kearney, 11/6131 / CitiMortgage v. Kearney, 12/11161, Dollinger permanently enjoined the lender from imposing any interest, fees or legal expenses on the borrower from 90 days before the filing of the complaint.

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