Wilmington Savings loses on four fronts in HELOC foreclosure standing fight
Start with the assignment. Bank of America’s mortgage transfer was executed by Pretium Mortgage Credit Partners I Loan Acquisition, LP, acting as attorney-in-fact. Wilmington Savings Fund Society produced no evidence Pretium had authority to sign on Bank of America’s behalf. Without that proof, the assignment was unverified.
Then the allonge – a slip attached to a negotiable instrument to carry endorsements. The lender submitted one with an undated endorsement from Bank of America, but the court found no proof it was “so firmly affixed” to the HELOC agreement as to become part of it.
Physical possession did not help either. An affidavit from a Bank of America assistant vice president failed to establish the lender ever held the original agreement.
That left the lost-note path. Wilmington Savings Fund Society admitted the original was gone. Under New York’s UCC 3-804, a party can enforce a lost instrument if it proves ownership and explains the loss. The affiant never stated when the search occurred, who conducted it, or how the agreement went missing. Four arguments, four failures.
The lower court had gone further still, dismissing the complaint on its own initiative. The appellate panel reversed that move, holding sua sponte dismissal – where a court acts without either party asking – “is to be used sparingly and only when extraordinary circumstances exist.” Nothing extraordinary existed here, so the case stays alive. The lender gets another shot if it can fix the paperwork.
