He resurfaced four years into the foreclosure. The court said it was too late
A Suffolk County borrower who ignored a mortgage foreclosure for years just lost his bid to fight back on appeal.
The New York Appellate Division, Second Department, affirmed on September 30 that the borrower could not vacate a 2019 court order allowing U.S. Bank Trust, N.A. to serve him by publication and appoint a guardian ad litem - a court-appointed representative for a party who cannot be located. The court also held he could not raise a statute of limitations defense because he never dealt with his default.
The case started in June 2018, when Federal National Mortgage Association - Fannie Mae - sued to foreclose on a mortgage tied to property in Suffolk County. In May 2019, FNMA moved for permission to serve the borrower by publication and to have a guardian ad litem appointed. The court granted the motion unopposed.
The case kept moving. U.S. Bank Trust, which succeeded FNMA as the foreclosing party, secured a default judgment against all nonappearing defendants in June 2022. The matter was referred to a referee to calculate the amount owed.
The borrower surfaced in March 2023 - nearly four years later - and moved to dismiss the complaint as time-barred and for lack of personal jurisdiction. He also sought to vacate the 2019 service order. The plaintiff opposed.
Suffolk County Supreme Court denied the motion in July 2024. The Appellate Division affirmed unanimously.
On vacatur, the court applied a straightforward test: a party trying to undo an order entered on default must show a reasonable excuse for the default and a potentially meritorious opposition to the original motion. The borrower showed neither. The court acknowledged that judges can vacate orders in the interest of justice even after the one-year statutory deadline, but only where there is fraud, mistake, inadvertence, surprise, or excusable neglect. Nothing in the record qualified.
The statute of limitations argument hit a more basic problem. Because the borrower never vacated his default, he was barred from raising the defense at all - a well-settled principle in New York foreclosure law reinforced across multiple appellate decisions.
The court did not reach the borrower's remaining arguments, finding them unnecessary given its determination on default and vacatur.
For servicers and their counsel, the practical takeaway is direct: a borrower who does not engage early in a foreclosure action may permanently lose access to defenses that could otherwise carry real weight.
The decision is a slip opinion, noted as uncorrected and subject to revision before publication in the Official Reports.
