Law360, February 16, 2023

Diana M. Eng and Alina Levi ●

On Feb. 14, New York’s highest court, the Court of Appeals, issued a ruling in Bank of America NA v. Kessler, reversing the Appellate Division, Second Department’s 2021 decision.

Specifically, the Court of Appeals held that including additional information, such as bankruptcy disclosures, debt collection disclosures and service members’ disclosures, in a 90-day preforeclosure notice is permissible and does not void such notice pursuant to Section 1304 of the New York Real Property Actions and Proceedings Law.

As such, a 90-day notice including such disclosures does not invalidate the subsequently filed foreclosure action. Notably, the Court of Appeals held that Section 1304 does not preclude such additional language, and such language does not violate or frustrate the legislative purpose of Section 1304.

Thus, financial institutions, lenders and servicers should review actions that were dismissed based on the Second Department’s prior decision in Kessler to determine whether they may be able to restore such actions.

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