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 Purchasers of Mortgages in Foreclosure Beware
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Anyone who purchases mortgages under foreclosure should pay attention to a recent case decided by the New York State Supreme Court. The decision provides defaulting mortgagors with a significant defense to a foreclosure action that may give pause to prospective buyers of such mortgages.
The action was brought in New York County, in FTBK Investor II LLC, as Trustee for NY Brooklyn Investor II Trust 1 v. Joshua Management LLC, Index No. 810164/11. The plaintiff in the action, Joshua Management, LLC, gave a mortgage and note in 2005 to Washington Mutual Bank, F.A. ("WaMu") to secure a mortgage covering property located in Manhattan. Several years later, in 2008, WaMu was seized by the FDIC and placed into receivership. The FDIC immediately transferred all of WaMu's loans to JPMorgan Chase & Co. ("Chase"). Sometime in 2010, the borrower defaulted on the mortgage and a foreclosure action was instituted in 2011. Thereafter, the mortgage and note were transferred by Chase to N.Y. Brooklyn Investor II, LLC. FTBK was substituted as plaintiff in the action.
If you have any questions or would like further information regarding any of the articles in this newsletter, please contact Keith Eng, Esq. (keng@prestitle.com) or Anthony Chiellino (achiellino@prestitle.com) at (212) 651-1200.
Also, if there are any topics that you would like us to include in future newsletters, please feel free to e-mail us with suggestions at info@prestitle.com. |
