Eviction Blocked Pending Ruling on Whether Foreclosure Was Valid

January 24, 2015

LVT Number: #25932

A co-op apartment shareholder tenant defaulted on a $180,000 mortgage loan she obtained to purchase a Brooklyn apartment. The lender foreclosed on the apartment in 2011, then assigned the property to the Federal National Mortgage Association (FNMA). FNMA then sued to evict tenant in housing court. Tenant, in turn, sued to stop the FNMA from evicting. The court ruled for tenant, finding that the original lender failed to give tenant 90 days' prior written notice of its intent to foreclose. This was required by the Uniform Commercial Code.

A co-op apartment shareholder tenant defaulted on a $180,000 mortgage loan she obtained to purchase a Brooklyn apartment. The lender foreclosed on the apartment in 2011, then assigned the property to the Federal National Mortgage Association (FNMA). FNMA then sued to evict tenant in housing court. Tenant, in turn, sued to stop the FNMA from evicting. The court ruled for tenant, finding that the original lender failed to give tenant 90 days' prior written notice of its intent to foreclose. This was required by the Uniform Commercial Code. So, FNMA was barred from going forward with the eviction proceeding until the court ruled on whether the foreclosure sale must be set aside as invalid. 

Newman v. Federal National Mortgage Association: 2014 NY Slip Op 51844(U), 2014 WL 7334192 (Sup. Ct. Kings; 12/23/14; Silber, J)

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