Ruling in Brigantine foreclosure case means lenders have to prove they hold mortgage in Atlantic, Cape counties

By KEVIN POST Business Editor

This beach-block home on the 400 block of 26th Street in Brigantine was the subject of a court battle over Bank of New York’s attempt to foreclose on it. The homeowner challenged the bank to produce the paperwork showing it owned the mortgage. When the bank couldn’t do so, the court said the foreclosure cannot proceed, at least not until the bank can produce the paperwork.

A ruling in Atlantic County by a state Superior Court judge may make foreclosure filings there and in Cape May County more difficult for lenders, requiring them to show they actually possess the mortgage note at the time they file.

The ruling comes as the number of foreclosure sales in southern New Jersey fell from the previous quarter and took a smaller percentage of all property sales than was seen nationwide.

Judge William C. Todd III ruled on June 29 that Bank of New York had “failed to establish that it was entitled to enforce the note as of the time the complaint was filed” and prevented it from proceeding with foreclosure.

The $1.38 million mortgage was for a beach-block house in Brigantine, and the foreclosure proceeding was challenged by the borrowers, investors Roman Krywopusk and Michael Raftogianis, both of Perkionmenville, Pa.

They used the original mortgage from American Home Acceptance in 2004 to buy the house at 403 26th St., Brigantine, as an investment property for

$1.7 million. The note was then securitized and transferred to other creditors.

Todd ruled that Bank of New York can “institute a new action to foreclose at any time, provided that any new complaint must be accompanied by an appropriate certification … confirming that plaintiff is in possession of the original note as of the date any new action is filed.”

Eric Garrabrant, 38, of Linwood and the attorney with the Flaster Greenberg office there who represented Krywopusk, said that Bank of New York hadn’t indicated yet whether it would refile or appeal Todd’s ruling.

He said the significance of the case was that in the Atlantic and Cape May counties jurisdiction of Todd, banks could no longer simply show that a mortgage had been assigned to them when foreclosing on a property.

“From now on, if you demand that the bank demonstrate how it owns the note and mortgage, the transaction by which they acquired it, and had ownership on the date the foreclosure complaint was filed, in Cape May and Atlantic counties they’re going to have to do that,” Garrabrant said.

If the case is appealed and upheld on appeal, the requirement could be applied throughout the state, he said.

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Case in reference below…



Bank of New York v. Michael Raftogainis
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