Borrower loses challenge to extra notice tucked inside foreclosure envelope
First, the envelope. RPAPL 1304 requires lenders or servicers to send borrowers a notice at least 90 days before commencing foreclosure. The statute says the notice must travel “in a separate envelope from any other mailing or notice.”
Here, a second notice rode along in the same envelope – one outlining additional rights the borrower might have in connection with certain bankruptcy proceedings. The borrower argued that broke the rule.
The court disagreed. Because the bankruptcy information was relevant to avoiding foreclosure and was neither false nor misleading, including it did not violate the separate-envelope requirement.
Then came the authority question. Select Portfolio Services, Inc. (SPS), the loan servicer, had sent the 90-day notice and the contractual notice of default on behalf of the trust. The borrower argued SPS had no power to do so.
The court found otherwise. A limited power of attorney authorized SPS, as attorney-in-fact of the “Owner Trustee” – Wilmington Savings Fund Society – to act “in the Trust’s name, place and stead” and “for the Owner Trustee’s benefit.” The enumerated transactions covered “the preparation and filing of notices of default” and other actions “necessary under the terms of the Mortgage, Deed of Trust or state law to expeditiously complete said transactions.”
