THE BANK DID NOT DEMONSTRATE IT HAD STANDING TO FORECLOSE; THE PROOF OF POSSESSION OF THE NOTE AND MORTGAGE DOCUMENTS AT THE TIME THE ACTION WAS BROUGHT WAS DEFICIENT; CRITERIA EXPLAINED (THIRD DEPT).

The Third Department, reversing Supreme Court, determined the bank in this foreclosure proceeding was not entitled to summary judgment because it did not establish standing to foreclose:

Although plaintiff attached a copy of the underlying note to the complaint and affirmed therein that it was in possession of the note prior to commencement of the action, the copy of the note attached to the complaint was not endorsed in blank, specially endorsed to plaintiff or accompanied by an allonge containing the required endorsements … . “[W]here there is no allonge or note that is either endorsed in blank or specially endorsed to the plaintiff, mere physical possession of a note at the commencement of a foreclosure action is insufficient to confer standing or to make a plaintiff the lawful holder of a negotiable instrument for the purposes of enforcing the note” … .

Plaintiff’s evidence in support of its summary judgment motion also did not establish its standing to foreclose the mortgage. In that regard, plaintiff submitted with its motion papers, among other things, a copy of the underlying note and two undated allonges, one of which contained a special endorsement that made the note payable to the order of plaintiff. However, mere possession of such allonges was insufficient to establish standing without evidence that they were “so firmly affixed” to the note “as to become a part thereof” at the time the action was commenced (UCC § 3-202 [2] … ). U.S. Bank N.A. v Sukljian, 2026 NY Slip Op 06191, Third Dept 10-22-26

Practice Point: Consult this decision for a detailed description of the documents the bank must possess to have standing to bring a foreclosure action.