Hundreds of New Jersey foreclosure cases are waiting in the wings for the state’s Supreme Court to issue what will be a landmark decision in the Garden State.
Legal scholars suggest lenders are waiting to see what the court will do with the U.S. Bank National Association v. Guillaume case before moving forward with thousands of pending foreclosures.
The issue in the case causing lenders to pause is the question of whether a foreclosure notice is made invalid because the lender filed a notice of intent to foreclose with the servicer listed on the notice instead of the lender.
In the original complaint, the Guillaume’s argue the lender, U.S. Bank NA, violated the Fair Foreclosure Act by not including the lender’s information in a spot that ended up containing contact information for the servicer.
Linda Fisher, a professor at Seton Hall Law School who has been following the case, said the foreclosure process is “kicked off by filing the notice of intent to foreclose.” Fisher filed an friend-of-the-court brief with the New Jersey Supreme Court in support of the Gillaumes’ claim.
Fisher says the intent to foreclose form has 24 data points, including the name of the lender and contact information for the lender.
The Guillaumes, who challenged the foreclosure on several fronts, initially claimed the lender “violated the FFA because although the notice of intent to foreclose listed plaintiff as the holder of the note, it did not list plaintiff’s address, but rather, listed the address and telephone number” of the servicer.
An appellate court ruled for the lender and against the plaintiffs saying “directing the Guillaumes to contact ASC (or the servicer) fulfilled the purpose of the notice provision under the FFA — making the debtor aware of the situation, and how and who to contact to either cure the default or raise potential disputes.”
But the case now awaits the New Jersey Supreme Court decision, causing some lenders to pause before launching foreclosures.
Fisher said the initial notice of intent to foreclose claimed the servicer was the lender and the holder of the obligation. Later in the case, the issue became the fact that the lender’s name was listed but with the servicer’s address.
“The banks are contending it is OK to enter only the name of the servicer,” Fisher said. “The Guillaumes are saying the servicer is not a substitute for the lender because the statute is quite clear, and it specifically mentions inclusion of the name of the lender.”