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A New York mortgage foreclosure case that began more than a decade ago has taken another turn after an appeals court overturned an order directing the sale of a residential property.
On October 21, 2026, the New York Supreme Court, Appellate Division, Second Department, reversed a 2025 foreclosure judgment in Bank of America, N.A. v. Maddox. According to the court’s opinion, published by Justia, the dispute involved a $400,000 promissory note signed by Michael McNamara in 2006; his wife, Alice, also signing the mortgage on their Babylon, New York, home. After Michael died in 2010, the foreclosure proceedings continued, with the appeals court ultimately finding that the bank had not adequately established its compliance with mandatory notice requirements or its legal standing to bring the case.
A $400,000 mortgage and a foreclosure case
The case began with a mortgage secured by residential property in Babylon. According to the appellate court’s decision, Michael McNamara signed a $400,000 promissory note in favour of American Brokers Conduit on January 23, 2006. Both Michael and Alice McNamara executed the mortgage. The bank alleged that the couple defaulted by failing to make monthly payments due from May 1, 2009, onwards. Michael died on September 9, 2010, leaving the dispute to continue with Alice involved in the proceedings.
In January 2014, Bank of America, N.A., commenced a foreclosure action against the borrowers and other defendants. Alice contested the case, raising several legal defences, including that the bank had not established its standing to sue and had failed to comply with New York’s statutory requirements for notifying borrowers before beginning foreclosure proceedings.
Lower court rulings favoured the bank
In July 2018, the Supreme Court in Suffolk County granted key parts of the bank’s motion for summary judgment against Alice.
It rejected her relevant defences concerning standing and notice compliance and referred the matter to a referee to calculate the amount owed. In March 2020, the lower court confirmed the referee’s report and issued a judgment of foreclosure and sale, directing that the property be sold. That judgment was subsequently vacated by the lower court on April 30, 2024.However, the proceedings did not end there. On June 23, 2025, the court issued another order and judgment of foreclosure and sale, again directing the sale of the property.
Alice’s appeals continued, and after her death, Robert Maddox, acting as executor of her estate, was substituted for her in the case. The appeals court’s October 2026 decision therefore addressed the later foreclosure judgment as well as the procedural status of the earlier appeals.
Why the appeals court reversed the foreclosure judgment
The central issue was whether Bank of America had demonstrated that it fulfilled the legal requirements necessary to obtain summary judgment against Alice.
Under Section 1304 of New York’s Real Property Actions and Proceedings Law, a lender generally must provide borrowers with a prescribed notice at least 90 days before commencing a mortgage foreclosure action. The notice must be sent by registered or certified mail and by first-class mail to the required addresses.
The appeals court concluded that Alice was entitled to this notice even though she had not signed the underlying promissory note.
She had signed the mortgage as a borrower, was identified as a borrower in the document and had agreed under the mortgage terms to pay amounts due under the note.The court also found that the bank had not adequately proved compliance with the notice requirement. An affidavit submitted by a bank officer relied on a review of business records but did not establish personal knowledge of the mailings or sufficiently describe the procedures used to ensure that notices were correctly addressed and sent.
Although evidence of certified-mail delivery was submitted, the bank had not established that the required notice was also sent by first-class mail more than 90 days before the action began.
The court therefore held that the bank had failed to establish its compliance with Section 1304.
The bank also failed to establish standing
A second major issue concerned the bank’s legal standing to bring the foreclosure action. In mortgage cases, a lender must establish that it held or had been assigned the underlying promissory note when the action commenced.
The appeals court found that the record did not show that a copy of the endorsed note had been attached to the original complaint. It also concluded that the bank officer’s statements about the bank’s possession of the note were based on unidentified business records that had not been produced.
The court treated those assertions as inadmissible hearsay and found that the bank had not established its standing.Consequently, the court reversed the June 23, 2025, foreclosure judgment and denied the relevant branches of the bank’s motion for summary judgment. It also awarded one bill of costs to Robert Maddox as executor of Alice’s estate. The ruling does not establish that the mortgage debt never existed or that the property can never be subject to foreclosure. Rather, it means the bank did not establish the necessary legal grounds for the relief granted in these proceedings.
The decision highlights how strict compliance with borrower-notification rules and proof of a lender’s standing can determine the outcome of a foreclosure case, even after years of litigation.