Bought the property in 2008, challenged the foreclosure in 2022
A Brooklyn corporation waited 14 years to challenge a foreclosure - and the court said that was far too late.
In a decision handed down on October 14, 2026, New York’s Appellate Division, Second Department, affirmed the denial of a motion by 194 Grant Corp. to intervene in a mortgage foreclosure action brought by Pennymac Corp. on a Brooklyn property. The corporation claimed it purchased the property from the borrower in August 2008 but did not move to intervene and vacate the foreclosure judgment until August 2022.
The backstory starts in July 2008, when Pennymac’s predecessor in interest filed the foreclosure action against the borrower and filed a notice of pendency against the property at the same time. 194 Grant recorded its title after that notice was already on file.
That timing is everything. Under New York law (CPLR 6501), a notice of pendency gives constructive notice - a legal flag that warns anyone who later acquires an interest in the property that litigation is underway. The court held that because 194 Grant’s title was recorded afterward, it was “bound by all proceedings taken in the action after that filing to the same extent as if it were a party to the action.”
The foreclosure moved forward without opposition. In March 2017, the court granted Pennymac’s unopposed motion for a default judgment against all non-answering defendants and allowed Pennymac to substitute in for its predecessor. In August 2019, the court issued an amended judgment of foreclosure and sale.
Then - three years after that judgment and roughly 14 years after taking title - 194 Grant finally moved to intervene. The lower court denied the motion as untimely. The Appellate Division agreed.
Intervention under CPLR 1012 or 1013 requires a timely motion, and courts weigh the gap between filing and when the proposed intervenor learned of the circumstances. 194 Grant “failed to offer any reason for the delay,” the decision states. The separate motion to vacate under CPLR 5015(a)(3) - which requires action within a “reasonable time” even without a hard deadline - was similarly untimely.
194 Grant also argued for vacatur in the interests of substantial justice. The Appellate Division found no unique or unusual circumstances warranting that relief.
For mortgage servicers and foreclosure counsel, the takeaway is straightforward: file the notice of pendency early and correctly, and subsequent purchasers are on constructive notice - no matter how long they wait to show up.
This is a slip opinion, uncorrected and subject to revision before publication in the Official Reports.
