The bank listed 17 agencies but never proved five covered the borrower's area
Wells Fargo just lost a foreclosure case it started 16 years ago - over a notice list.
The New York Appellate Division, Second Department, reversed a foreclosure judgment against a Suffolk County homeowner on September 16, finding Wells Fargo Bank, N.A. failed to prove its pre-foreclosure notice met RPAPL 1304 requirements.
The case dates to August 2010, when Wells Fargo filed to foreclose on a property in Selden. In February 2019, the bank moved for summary judgment - a ruling without a full trial. The borrower cross-moved to dismiss, arguing the bank had not complied with RPAPL 1304, which requires lenders to send a 90-day pre-foreclosure notice before filing suit. Suffolk County Supreme Court sided with the bank.
What followed was a drawn-out fight over a referee's calculations - the court rejected the first report in June 2023 and sent it back. A second report came through in 2024, and on September 23, 2024, the court entered a judgment of foreclosure and sale. The borrower appealed.
The Second Department zeroed in on the housing counseling agency list inside the 90-day notice. Under the statute as it existed when the action was commenced, the notice had to include "a list of at least five housing counseling agencies" designated by the Division of Housing and Community Renewal that serve the borrower's region.
Wells Fargo's notice, backed by an affidavit from the vice president of loan documentation, listed 17 "HUD Approved Housing Counseling Agencies." The problem: the bank never proved at least five served the borrower's region.
That gap was fatal. The appellate panel cited its own precedent holding that proper RPAPL 1304 notice is a condition precedent to starting a foreclosure. The court also rejected the argument that the deficiency was a fixable technical irregularity under CPLR 2001.
The borrower did not walk away with a clean win either. The court upheld the denial of his cross-motion, finding he had not proven the listed agencies did not serve Long Island or that he had been denied assistance.
The result: the foreclosure judgment is reversed, summary judgment denied, and a case first filed in 2010 is effectively reset.
For servicers and foreclosure counsel, listing housing counseling agencies without proof that at least five serve the borrower's region can unwind years of litigation - even after securing a judgment of sale.
