The Second Department determined foreclosure proceedings could proceed despite an erroneous, recorded satisfaction of mortgage:
“A mortgagee may have an erroneous discharge of mortgage, without concomitant satisfaction of the underlying mortgage debt, set aside, and have the mortgage reinstated where there has not been detrimental reliance on the erroneous recording” … . “Only bona fide purchasers and lenders for value are entitled to protection from an erroneous discharge of a mortgage based upon their detrimental reliance thereon” … . …
… [T]he complaint's factual allegations, i.e., that the plaintiff was the holder and owner of the subject note and mortgage, that the satisfaction of mortgage was erroneously executed and recorded, that the mortgage had not been satisfied, that the original mortgagor defaulted on the note and mortgage, and that the balance due under the note remained outstanding, were sufficient to set forth viable causes of action to foreclose the mortgage and to cancel and vacate the satisfaction of mortgage … . Wells Fargo Bank N.A. v E & G Dev. Corp., 2016 NY Slip Op 02988, 2nd Dept 4-20-16