Recent NJ Lower Court Ruling Stalling $1.38M Mortgage Foreclosure Could Affect Entire State If Challenged & Upheld On Appeal

In Atlantic City, New Jersey, The Press of Atlantic City reports:

• A ruling in Atlantic County by a state Superior Court judge may make foreclosure filings there and in Cape May County more difficult for lenders, requiring them to show they actually possess the mortgage note at the time they file. [...] Judge William C. Todd III ruled on June 29 that Bank of New York had “failed to establish that it was entitled to enforce the note as of the time the complaint was filed” and prevented it from proceeding with foreclosure.(1) The $1.38 million mortgage was for a beach-block house in Brigantine, and the foreclosure proceeding was challenged by the borrowers, investors Roman Krywopusk and Michael Raftogianis, both of Perkionmenville, Pa.

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• Eric Garrabrant, 38, of Linwood and the attorney with the Flaster Greenberg office there who represented Krywopusk, said that Bank of New York hadn’t indicated yet whether it would refile or appeal Todd’s ruling. He said the significance of the case was that in the Atlantic and Cape May counties jurisdiction of Todd, banks could no longer simply show that a mortgage had been assigned to them when foreclosing on a property.

• “From now on, if you demand that the bank demonstrate how it owns the note and mortgage, the transaction by which they acquired it, and had ownership on the date the foreclosure complaint was filed, in Cape May and Atlantic counties they’re going to have to do that,” Garrabrant said. If the case is appealed and upheld on appeal, the requirement could be applied throughout the state, he said.

For the story, see Ruling in Brigantine foreclosure case means lenders have to prove they hold mortgage in Atlantic, Cape counties.

(1) According to the story, Todd ruled that Bank of New York can “institute a new action to foreclose at any time, provided that any new complaint must be accompanied by an appropriate certification ... confirming that plaintiff is in possession of the original note as of the date any new action is filed.”