Same property, same afternoon, two closings - and a payoff wire that arrived too late
Two buyers closed on the same Suffolk County property on the same afternoon - and 68 minutes decided who kept it.
The Appellate Division, Second Department, ruled on September 23, 2026, that a JPMorgan Chase Bank foreclosure auction stood, even though a separate buyer had contracted to purchase the same property for $425,000 and wired the mortgage payoff the same day. The payoff just arrived too late.
JPMorgan filed the foreclosure action in August 2022 against the homeowners. By March 2024, a court confirmed $43,368.84 was owed and ordered the property sold.
On June 21, 2024, at 3:15 p.m., the foreclosure auction wrapped up. The successful bidder purchased the property for $53,000, subject to a second mortgage of $65,830.47. Both sides signed a memorandum of sale.
At 4:23 p.m. that same afternoon, the homeowners closed on a separate sale of the property to a different buyer for $425,000. That buyer's team wired JPMorgan a payoff of $53,478.17, drawn from a payoff letter good through June 20, 2024 - one day before the wire was sent.
The contract buyer moved to intervene, asking the court to throw out the foreclosure judgment and void the auction on the grounds the price was unconscionably low. The lower court in Suffolk County agreed and blocked the auction buyer from completing the purchase.
The appellate court reversed. Under New York law, a homeowner's right to redeem a mortgage is "extinguished as a matter of law upon the foreclosure sale, whether or not the deed has been delivered," and once lost, "it cannot be revived, even by court order." The auction closed at 3:15 p.m. The wire hit at 4:23 p.m. By then, the auction buyer was already the equitable owner.
On the price challenge, the court was equally direct. A low price alone does not void a foreclosure sale. There must be "fraud, collusion, mistake, or misconduct," or a price "so inadequate as to shock the court's conscience." Measured against the auction bid plus the second mortgage balance, the price did not cross that line.
The four-justice panel unanimously reinstated the foreclosure judgment and the sale.
For servicers and closing attorneys, the math is unforgiving. A payoff wire that clears after the gavel falls is a payoff wire that clears too late - no matter the dollar amount, the good faith, or the payoff letter in hand.
The decision is subject to revision before publication in the Official Reports.
