Anthony L. Velasquez, Esq. has written a variety of legal articles on issues including leasing, foreclosures, real estate law, construction law, consumer protection, bidding, title disputes, and other areas of law.  From time to time, various articles will be re-published below.  For past articles or for any other questions please contact the Law Offices of Anthony L. Velasquez, Esq.

Foreclosure action?  Pay specific attention to the details!
By Anthony L. Velasquez, Esq.  July, 2012  

A recent landmark mortgage foreclosure case decided by the NJ Supreme Court has once again stressed the point that specific attention be paid to procedural details.  Yet while the Court in U.S. Bank v. Guillaume, 209 N.J. 449 (2012), found that a violation of the required procedures had occurred, it crafted a remedy that was something less than the extreme measure of dismissing the case in its entirety and sending the lender back to square one.  Instead, it allowed the lender to cure the deficiency through corrective action.  

The case focused upon the “30 Day Notice” requirement contained within New Jersey’s Fair Foreclosure Act (FFA), N.J.S.A. 2A:50-53 et seq., which sets forth that a plaintiff must notify the homeowner of its intent to commence a foreclosure lawsuit at least 30 days prior, along with providing the name of the bank, the amount needed to reinstate the loan and other information designed to assist the defaulting borrower in saving his or her home.  In U.S. Bank v. Guillaume, the 30 Day Notice letter included the name of the loan servicer (America’s Servicing Company), but not the name of the owner of the loan (U.S. Bank).  The homeowner Guillaume contacted the loan servicer on several occasions in an attempt to resolve the matter, but no resolution was reached.  Default was entered, and ultimately final judgment was entered directing that the property be sold at Sheriff’s Sale.   

The homeowner Guillaume then sought to vacate the final judgment and have the foreclosure action dismissed in its entirety because of the procedural defect committed through the omission of the loan owner’s name from the 30 Day Notice.  Guillaume claimed he was misled and confused by U.S. Bank’s communications with him regarding potential loan modification while also prosecuting the foreclosure action.  Both the trial court and the appellate court held that the lender had “substantially complied” with the requirements of the FFA; but the NJ Supreme Court reversed and held that a foreclosing lender must provide a 30 Day Notice that includes “the name and address of the actual lender, in addition to the contact information for any loan servicer” in order to satisfy the specific requirements of the statute.  Thus, U.S. Bank had violated the FFA.  

Historically, this type of conclusion resulted in a complete dismissal of the foreclosure action and would require that the lender provide a new 30 Day Notice letter and then file a new complaint (new lawsuit).  This would result in an extreme loss of time, usually 1-2 years based upon the current backlogs at the courts in processing foreclosures in New Jersey, in addition to the substantial monetary loss incurred through attorney fees and costs of suit.  But the NJ Supreme Court did not order this remedy; instead it allowed U.S. Bank to “cure” the defect by filing a corrective 30 Day Notice.  It could then continue in its present lawsuit (which had nearly concluded).  The High Court stated, “In determining an appropriate remedy for a violation of [the 30 Day Notice requirement], trial courts should consider the express purpose of the provision: to provide notice that makes the debtor aware of the situation, and to enable the homeowner to attempt to cure the default… Accordingly, a trial court fashioning an equitable remedy for a violation of [the 30 Day Notice requirement] should consider the impact of the defect in the notice of intention upon the homeowner’s information about the status of the loan, and on his or her opportunity to cure the default.”   

In sum, this case indicates that all of the technical, detailed and specific requirements set forth in the FFA should be satisfied by foreclosing lenders; the hope of a defect subsequently being found to be “substantially compliant” is severely diminished, if at all existent within the law.  But at the same time, lenders have been provided a gateway through which to take corrective action to cure defects during the pendency of an existing foreclosure action, as long as the weight of the equities remains in their favor.  It is highly advised that you seek knowledgeable and experienced legal counsel to assist you in your matters related to foreclosure actions within New Jersey.  You are invited to contact the Law Offices of Anthony L. Velasquez, Esq., at for all of your foreclosure matters, along with legal matters related to real estate, land use, tax liens, property law, title disputes, financing and closings. 

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