Very interesting – especially given how many times we’ve seen BONY sell property to Flippers during litigation.
Now, under Altshuler, if any defendant merely files a notice of appeal (truly a ministerial act) from an otherwise final judgment of foreclosure and sale (or from an order confirming a referee’s report of sale), without obtaining a stay, the pendency of that appeal effectively serves as a long and dark cloud on title, preventing a bona fide purchaser in foreclosure from obtaining clean, insurable, title to the foreclosed property until all possible appeals are exhausted. That exhaustion, and that uncertainty, could endure for several years (as it did in Altshuler).
Altshuler serves to caution all foreclosure mortgagees, prospective purchasers, title insurers, and all other parties (such as new lenders, tenants, or contractors) acquiring an interest in the mortgaged property that their bona fide interests could be nullified long after the fact. This is likely to chill the willingness and ability of title insurance companies to issue insurance policies on foreclosed real estate while an appeal could be perfected or has been perfected and remains pending.
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It’s procedure, stupid! That is the message coming out of several courts who are subjecting foreclosure actions to increasing scrutiny. They apparently are noticing that the facts are not as assumed in most cases and that the true facts are being papered over with instruments that appear facially valid. Now the long standing rule that a person who takes title with knowledge of litigation might not get title after all. In New York, title was unwound. The conclusions of the authors is what I said years ago. There is no way that continuing…
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