Pro Se NJ Homeowner Scores Win, Stalls Foreclosure Where State 'Fair Foreclosure Act' Notice Fails To I.D. Lender; Naming Servicer Only Not Enough

In Middlesex County, New Jersey, the New Jersey Law Journal reports:

• Homeowners fighting foreclosure have a new weapon: a published trial court ruling that the notice required by law to be sent to mortgagors by certified mail must identify the lender and not just the loan servicing company.
• Because the foreclosure notice sent to George and Mona Elghossain did not name the Bank of New York Mellon, which owns their debt, Middlesex County Chancery Division Judge Glenn Berman dismissed the suit without prejudice, rejecting the bank’s request to cure the defect by redoing the notice correctly.
• Monday’s ruling, Bank of New York Mellon v. Elghossain, MID-F-13402-10, follows a series of decisions finding would-be foreclosers that did not have possession of the original mortgage note lacked standing and could not go ahead with the process.
• Like the standing cases, the notice issue in Elghossain is the consequence of the widespread securitization of mortgages, with accompanying pooling and servicing agreements that have placed loan servicing companies rather than lenders at the forefront of foreclosure efforts.

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• The 1995 N.J. Fair Foreclosure Act requires such notice and specifies that it state “the name and address of the lender and the telephone number of a representative of the lender whom the debtor may contact … .” It defines “lender” as “any person, corporation, or other entity which makes or holds a residential mortgage, and any person, corporation or other entity to which such residential mortgage is assigned.”
• Berman found the notice to the Elghossains — mentioning only the servicer, BAC Home Loans, and not Bank of New York — violated the act, which he called “clear, unambiguous, and readily comprehensible, (especially to a sophisticated lender).”

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• Berman [] said substantial compliance with the law is not enough; that “strict compliance is required.”(1) He would not allow Bank of New York to fix the mistake by serving a corrected notice. “Merely re-serving the [notice] would eviscerate the statute’s plain meaning and effectively reward plaintiff for its neglect, regardless of how benign it may appear,” he wrote.

For more, see Foreclosure Notice Found Deficient for Naming Only Loan Servicer, Not Lender (requires paid subscription; if no subscription, TRY HERE).

For the ruling, see Bank of New York Mellon v. Elghossain (when link expires, GO HERE).

Thanks to Deontos for the heads-up on the story.

(1) This raises the question, in connection with those past foreclosure actions where strict compliance was not met, and where a judgment was obtained anyway and the property subsequently sold at auction:

• Does the failure to strictly comply with this notice requirement make the foreclosure judgment & subsequent sale at auction (and any further sales to 'downstream' 3rd party bona fide purchasers) void ab initio (ie. wholly void, nugatory, without effect, etc.) and subject to attack at any time, or merely voidable (although defective, nevertheless valid as to bona fide purchasers), where any attack thereon is subject to restrictions???