Sunday, March 4, 2012

NJ High Court: Actual Lender's Name, Address Must Be Disclosed When Notifying Homeowner Of Intent To Foreclose

In Trenton, New Jersey, Bloomberg reports:

  • New Jersey’s Supreme Court ruled that the lender must be named in documents indicating a bank’s intention to foreclose on a mortgage before a residential property can be seized.

  • The case involves the foreclosure on an East Orange home owned by Maryse and Emilio Guillaume, who received a notice of intention to foreclose in May 2008. That notice included the name of the mortgage servicer, America’s Servicing Co., while omitting the name of the lender. Credit Suisse AG (CSGN) made the loan and assigned it to US Bank NA.

  • The state high court in Trenton ruled [] that the notice sent to the Guillaumes failed to comply with New Jersey’s Fair Foreclosure Act, which requires the name and address of the actual lender, as well as contact information for a loan servicer. Failure to do so creates “potential for significant prejudice” to homeowners, the court said.

  • “A misunderstanding about a lender’s identity could prompt a homeowner to make a critical error at a time when he or she is struggling to avert foreclosure,” the court said in the opinion.

  • The court ruled that while a trial court judge erred on that point in interpreting the Fair Foreclosure Act, the judge reached the correct conclusion in ordering a default judgment against the couple. The Guillaumes failed to demonstrate either “excusable neglect” or a “meritorious defense” to their foreclosure, according to the ruling.

For the story, see Lenders Must Be Named in Foreclosures: NJ Court.

See also, The Star Ledger: State Supreme Court decision could unlock foreclosure floodgates in New Jersey:

  • The ruling also reversed a separate appellate decision, known as Laks, which said a foreclosure should be dismissed if its notice of intent did not comply. Now, trial court judges can dismiss the action, order a corrected notice or determine another appropriate solution. Attorney Mark Melodia, who represented ASC, said the Laks decision left attorneys unsure of what to include in their filings, effectively "clogging" the system.

For the ruling, see U.S. Nat'l Bank Association v. Guillaume.

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