On September 16, 2026, the Second Department issued a decision in Wilmington Sav. Fund Socy., FSB v. Hilario, 2026 NY Slip Op. 05351, holding that the plaintiff in a foreclosure action had failed to establish its standing, explaining:
Where, as here, a defendant challenges the plaintiff’s standing in a foreclosure action, the plaintiff must demonstrate that it was the holder or assignee of the note at the time the action was commenced. Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident. Pursuant to UCC 3-804, the owner of an instrument which is lost, whether by destruction, theft or otherwise, may maintain an action in his or her own name and recover from any party liable thereon upon due proof of his or her ownership, the facts which prevent his or her production of the instrument and its terms.
Here, the plaintiff, which admitted that the original HELOC agreement is lost, failed to establish, prima facie, its standing pursuant to UCC 3-804. The plaintiff failed to demonstrate that it was the owner and holder of the HELOC agreement. The plaintiff submitted an assignment of mortgage dated August 8, 2017. In the assignment, BANA purported to assign the mortgage, together with the note described therein, to the plaintiff. The assignment was executed on BANA’s behalf by Pretium Mortgage Credit Partners I Loan Acquisition, LP (hereinafter Pretium Mortgage Credit Partners), as attorney-in-fact. However, the plaintiff failed to demonstrate the validity of the assignment, as the plaintiff produced no evidence that Pretium Mortgage Credit Partners had authority to execute the assignment on BANA’s behalf. The record did not demonstrate that a purported allonge to the HELOC agreement, which was annexed to an affirmation submitted by the plaintiff and contained an undated endorsement by BANA to the plaintiff, was so firmly affixed to the HELOC agreement as to become a part thereof. Moreover, an affidavit from an assistant vice president of BANA, the plaintiff’s purported predecessor in interest, failed to establish that the plaintiff was ever in physical possession of the HELOC agreement.
The plaintiff also failed to set forth the facts that prevented the production of the original HELOC agreement. In the affidavit from BANA’s assistant vice president, the affiant failed to state when the alleged search for the HELOC agreement occurred, who conducted the search, and when and how the HELOC agreement was lost.
Accordingly, the Supreme Court properly denied those branches of the plaintiff’s motion which were for summary judgment on the complaint insofar as asserted against the defendants, to strike the defendants’ answers, and for an order of reference.
(Internal quotations and citations omitted).
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