• July 8, 2024

    Hill Wallack's NYC Office Recently Completed a Foreclosure Sale in a Heavily Litigated Matter

    Hill Wallack LLP’s New York City office recently completed a foreclosure sale in a heavily litigated matter involving state and federal issues, actions and appeals. While the issues may not have been novel, as many servicers know, it is these “nuts & bolt” issues that if not properly handled can lead to a quick dismissal of the foreclosure.

    The matter involved a deed poacher, equity poacher or deed rat as they are commonly known. For those unfamiliar with this varmint, it is a speculator/opportunist who acquires a mortgagor/owner’s title to a property already in foreclosure through a cash payment (usually a pittance). The interloper then inserts his way into the proceedings fighting the mortgagee at every turn and going on the offensive by bringing Fair Debt Collection Practices Act, Racketeer Influenced and Corrupt Organizations (RICO) and other tangential actions in an attempt to coerce a short payment or cash for keys giving him a payday on his miniscule investment. The new owner then usually moves into the mortgaged premises he has minimal living expenses over the course of the litigation

    Our action involved such a situation. After taking title, he immediately intervened in the foreclosure action and asserted an answer with the typical defenses of lack of standing, lack of notice, etc. That most of these were personal to the borrower/mortgagor and unavailable to him, did not discourage him. He commenced a RICO action in federal court against each and every servicer ever involved on the loan, claiming that the servicers conspired to wrongfully foreclose and take title to his “home” – an especially obtuse argument since the foreclosure action was pending well before he acquired title to the property. While the foreclosure judge marched the foreclosure action to trial, the “satellite” actions sprouted like weeds.

    The previously mentioned RICO action was dismissed by the federal district court, but was appealed to the U.S. Court Appeals for the 2nd Circuit. Hill Wallack successfully argued for affirmance of the dismissal. We also successfully dismissed two separate FDCPA actions in state court. The defendant also commenced a separate action in state court attempting to have the various assignments of mortgage deemed void – an end around attempt to attack on standing in the foreclosure action. Hill Wallack obtained a dismissal of that action just before the trial in the foreclosure action was to commence.

    When the foreclosure trial commenced, it involved witnesses and documentary evidence from the current and former servicer, evidence of the several note transfers, multiple loan histories, trust agreements, and various powers of attorney. In granting Judgment after trial, the court found that “the chain of title has been flawlessly put into evidence with people that have personal knowledge, that have verified the accuracy. Every component that [prior counsel] missed in their Summary Judgment, they went out of their way to put into evidence at this trial.”

    The foreclosure sale was then successfully held without impediment.