These common missteps have derailed foreclosure cases for years – and they're still doing it
Three New York appellate decisions issued on May 6, 2026, show how procedural mistakes can sink a foreclosure case before it even gets going.
All three rulings came out of the Appellate Division, Second Judicial Department, and all three involved U.S. Bank National Association on the plaintiff side. If you work in mortgage servicing or foreclosure, these cases are worth your attention. They touch on some of the most common – and most costly – missteps in the business: suing a borrower who has already died, proving you actually hold the note, and dealing with defendants who try to represent each other in court without a law license.
Here is what happened.
In the first case, the borrower, James Williams, signed a $627,000 note in April 2008, secured by a mortgage on a property in Elmhurst. Williams died on April 24, 2009. The lender's predecessor went ahead and filed the foreclosure action in January 2010 – against Williams, even though he was already dead.
What followed was more than a decade of procedural wrangling. The Surrogate's Court appointed an estate administrator. The mortgage changed hands through multiple assignments, eventually landing with Wilmington Trust, National Association, as Trustee of ARLP Securitization Trust. The property itself was transferred to a company called Lyberty 18805 Corp. in September 2016 by the decedent's heirs. ARLP got itself substituted as plaintiff, amended the case caption to name "Unknown Heirs," and even won summary judgment in October 2019.
But Lyberty pushed back. It argued the whole case was dead on arrival because you simply cannot sue someone who is no longer alive. The lower court agreed, tossing the case. The Appellate Division affirmed. The rule is straightforward: you cannot start a foreclosure against a deceased borrower. And renaming the defendants on the caption after the fact does not fix the problem. Justices Mark C. Dillon, William G. Ford, Deborah A. Dowling, and Susan Quirk all agreed.
For servicers, the takeaway is clear. Before you file, confirm your borrower is alive. If they are not, you need to go through the estate. There is no workaround.
The second and third cases come from the same foreclosure. This one involved a $330,000 note signed by Michael M. Speller in July 2005, secured by a mortgage on a property in Brewster. The mortgage was also signed by his wife, Ellen M. Fitzsimmons.
In the earlier appeal, the bank filed the foreclosure in January 2022. Speller, who is not a lawyer, filed an answer on his own behalf and tried to file one for his wife too. The lower court initially granted the bank's request for summary judgment, but after a series of motions, it reversed course. It threw out the portion of the answer that Speller filed on behalf of Fitzsimmons, gave her time to respond herself – either on her own or through a licensed attorney – and vacated the earlier summary judgment orders.
The plaintiff appealed only the portion of the order that extended Fitzsimmons's time to answer, and the Appellate Division affirmed on that point. In New York, you cannot practice law on someone else's behalf unless you are a member of the Bar. Being married to someone does not change that. Fitzsimmons deserved her own chance to respond, and the court was right to give her one. Justices Francesca E. Connolly, Valerie Brathwaite Nelson, Barry E. Warhit, and Lourdes M. Ventura concurred.
In the later appeal from the same case, the fight shifted to whether the bank could prove it had the right to foreclose in the first place. After a nonjury trial on that question, the lower court ruled the bank had not proved it held the note when the case was filed. It dismissed the complaint and ordered the bank to pay the defendants' expenses under Real Property Law section 282(1).
The Appellate Division reversed that one. The bank presented the testimony of Charles Brehm, a vice president at Computershare Delaware Trust Company, along with copies of a limited power of attorney and a transaction addendum. Brehm's testimony laid a proper foundation for those documents as business records. Taken together, they established that Computershare was the custodian of the note on behalf of the bank and was in possession of the original note at the time the action was commenced. The lower court should have ruled in the bank's favor on that issue and should not have dismissed the case or ordered expenses on its own. The same four justices concurred.
So, what does all of this mean if you are in the mortgage business?
These three cases, all decided on the same day, are a reminder that the details matter. The first case tells you that failing to check whether your borrower is alive before you file can waste years of work and legal fees. The two related cases show that proving you hold the note requires solid documentation and credible testimony – but also that if you do the work, an appellate court will back you up even when a lower court gets it wrong. And the unauthorized practice of law issue, while it may seem like a side note, can delay a case and force you to start parts of it over again.
None of these issues are new. But they keep coming up, and they keep costing lenders time and money. The lesson is the same one it has always been: get the basics right from the start.
