The Second Department published the attached decision yesterday entitled Wells Fargo v. Eisler. I have attached the relevant point heading from Wells Fargo’s brief which set out the then current state of the law. The issue was whether the bank adequately proved that it sent the attached unsigned notice of default/acceleration letter. It is undisputed that the mailing of this letter is a condition precedent to starting a foreclosure action pursuant to the terms of the mortgage. Banks across America are unable or unwilling to provide any information as to the identity of the purported sender. The affidavit provided is quite typical of those routinely used by banks in foreclosure actions. In essence, a bank employee swears that based on a review of the books and records of the bank (here Wells) the notice of default letter “was sent.” In my experience, this key provision is always written in the passive voice.
For years, banks have successfully argued if the default letter is contained in their business records, it must have been sent.
This panel had two of the same Justices from the Bank of New York v. Silverberg panel. Although I was hoping for a more strongly worded decision, the holding is clear: the bank didn’t prove it sent the notice of default/acceleration letter.
The Court wrote: “The unsubstantiated and conclusory statements in this affidavit, which indicated that the required notice of default was sent in accordance with the terms of the mortgage, combined with a copy of the notice of default, failed to show that the required notice was mailed by first class mail or actually delivered to the notice address.”
The Court affirmed the order of Justice Aliotta of Richmond County.
This case will have widespread ramifications on foreclosure actions. The vast majority of foreclosures in New York State have mortgages with provisions which require a notice of default be sent. In my opinion, lower courts can use this decision to clear their dockets and dismiss the majority of foreclosure actions.