New York Court Says Foreclosing Creditors Have Standing Even If Note Was Discharged

A creditor has standing under New York law to initiate foreclosure actions, even if the note has been discharged in bankruptcy, a New York appeals court said (Deutsche Bank Trust Co. Americas Inc. v. Vitellas, 2015 BL 210815, N.Y. App. Div., 2013-07197, 7/1/15).

The July 1 ruling by the New York Supreme Court Appellate Division allows a Deutsche Bank unit, as trustee and assignee of the note, to maintain a foreclosure action to recover payment through sale of property, even though it cannot pursue the debtors.

Any other result, Judge Jeffrey A. Cohen said, would give debtors ...