A New York appellate court has reversed a judgment of foreclosure against Monica and John Prestia in a case involving the Bank of New York Mellon (docket number 2021-07031). This decision, made on July 29, 2026, affects the couple's mortgage on their property in Nissequogue and raises important questions about mortgage foreclosure procedures in New York.

The ruling is significant because it demonstrates the court's scrutiny of foreclosure actions, particularly regarding a lender's standing to initiate such proceedings. The Prestias had asserted various defenses against the foreclosure, including a claim that the bank lacked the legal standing to pursue the case.

Background

The dispute began in November 2012 when the Bank of New York Mellon filed a lawsuit to foreclose on the Prestias' mortgage. The couple responded by asserting several affirmative defenses, one of which was a lack of standing by the bank to bring the foreclosure action. They argued that the bank did not possess the necessary legal rights to enforce the mortgage.

In 2014, the bank sought summary judgment, which is a legal move to resolve the case without a trial, claiming it had the right to foreclose. The Prestias countered with their own motion to dismiss the complaint. However, the Supreme Court of Suffolk County ruled in favor of the bank, granting its motion and denying the Prestias' cross-motion. This set the stage for a series of appeals and motions that would ultimately lead to the recent ruling.

The Ruling

The Appellate Division of the Supreme Court of New York, consisting of Justices Angela G. Iannacci, William G. Ford, Lourdes M. Ventura, and Susan Quirk, decided to reverse the earlier judgment of foreclosure and sale. The court found that the bank did not adequately prove its standing to initiate the foreclosure action.

The court ruled, "the report of a referee should be confirmed whenever the findings are substantially supported by the record, and the referee has clearly defined the issues and resolved matters of credibility."

However, the court noted that the referee's report was based on inadmissible hearsay and lacked probative value. The court stated, "computations based upon a review of unidentified and unproduced business records constitute inadmissible hearsay and lack probative value." This finding led to the decision to reject the referee's report and remand the case back to the lower court for further proceedings.

Impact

This ruling has significant implications for mortgage foreclosure cases in New York. It emphasizes the importance of a lender's standing in foreclosure actions, particularly the necessity of proving ownership of the underlying mortgage note at the time the foreclosure action is initiated. The decision also highlights the need for proper documentation and evidence in such cases.

The outcome of this case may influence how banks and mortgage lenders prepare their foreclosure cases in the future. It sets a precedent that could encourage homeowners to challenge foreclosure actions more vigorously, especially if they believe the lender lacks standing or has not followed proper legal procedures.

What's Next

The case has been remitted to the Supreme Court of Suffolk County for further proceedings. It is unclear if the Bank of New York Mellon will appeal the appellate court's decision. There are no related cases pending at this time.